Some experts who believe the stock is overblown say that demand for Tesla cars "could materially wane" after a finite number of "early adopters" - people who like to buy new technology gadgets for their own interest and enjoyment - are satisfied.
J.P. Morgan's analysts also said that Tesla "still has its work cut out for it" to meet Musk's gross profit margin target of 25 percent. The gross margin in the first quarter stood at 5.7 percent after excluding ZEV credits. (J.P. Morgan, which also provides services to Tesla, raised its target price to $55.79 from $42 a share.)
Anderman added that Tesla still doesn't have a track record that reliably tells consumers (and investors) how long batteries will last, how much it will cost to service them, or how much that will affect resale value. The company has made some guarantees that could prove costly to deliver.
Analysts also point to some positives signs for Tesla. It lowered costs, produced more cars than expected, hasn't reported major reliability problems and produced battery packs for Toyota and Daimler-Benz. Musk forecasts the sale of 21,000 cars, which would give Tesla nearly 10 percent of the market for passenger cars costing at least as much as Tesla's base price.
The company's major shareholders, after Musk, include Fidelity Investments, Morgan Stanley, Abu Dhabi Water & Electric, and Daimler.
Then there is the Musk factor. Born in South Africa, he made a fortune in Zip2, a firm that sold software for online content, and PayPal. Since then he has founded SpaceX for commercial space flights, Tesla Motors, and SolarCity, which designs, finances and installs solar energy systems.
Like many auto industry executives, Musk has a flare for salesmanship and tweets several times a day. He has introduced generous financing plans, opened up about three dozen spiffy dealerships and fiercely attacked a negative piece about the car's range in The New York Times.
For now, he has prevailed over the naysayers. Tesla has no liquidity problems like those that forced Fisker Automotive to halt production. And its reviews have been good. "So is the Tesla Model S the best car ever?" Consumer Reports asked. "We wrestled with that question long and hard. It comes close."
That sort of enthusiasm is the last thing short sellers want to hear. Short sellers borrow and sell shares of a company and make money if the price falls before they have to return the shares. If the share price rises, however, short sellers often scramble to cover themselves before the price rises even further. When they do that, short sellers can drive a stock price even higher in what is known as a short squeeze.
That might account for part of the recent run-up in Tesla's price. The shares shorted amounted to about a third of the free-floating shares of Tesla as recently as February. It's about 11 percent now.
The short sellers' belief that Tesla's horizons are limited might be proven right - in the long run.
Anderman said that "in two to four years they can be looking at a stagnant or shrinking market, increased service and warranty costs, and reduced revenue from ZEV credit sales and battery pack sales." But, he said, "in the short term, it] looks exciting and what they have done so far is brilliant."