Can shares of Tesla electric-car maker's stay white-hot?

• Tesla shares are surging
• Stock is up 132%25 the past six weeks
• But is the electric-car maker a tech%2C not auto stock%3F

Shares of electric-car maker Tesla fell Tuesday afternoon, erasing the trading session's earlier gains. Shares are still more than doubled the past six weeks.

And the price of the white-hot stock rocketed the first week of May after the company announced its first profitable quarter.

Tesla shares closed Monday at $83.27 a share. That was down 5.2% for the day, but the stock up 49% from $55.79 a share Thursday before its first-quarter earnings report. Since April 1, the shares have rocketed 120%.

Investors' latest infatuation with the Calif.based electric-car maker follows a glowing review of its only model, the Model S sedan, on Friday from Consumer Reports magazine.

Investors are liking what they saw in the details of the electric-car maker's earnings report. The $11 million first-quarter profit shattered the assumption that no automaker can make money selling small numbers of plug-in cars. And Tesla posted a 17% gross profit margin, using American workers, in an industry where 10% is considered outstanding.

"There's a tremendous amount of enthusiasm for this car and this company in California, which we don't see here on the other side of the continent," said Theodore O'Neill, founder of Connecticut-based Litchfield Hills Research. "How far can Tesla go? As far as they want to go."

As impressive as its first quarter looked, it's going to be a long road. Tesla's fortunes are tied to its only car, the Model S, which ranges in price from $70,000 before tax credits to more than $100,000. The car can go 230 to 300 miles on a charge, depending on the size of the battery. Consumer Reports, whose reviews are among the most closely watched in the auto business, called it the best car it has tested since 2007, giving it a score of 99 out of 100.

But Tesla has to show it can be consistently profitable with a single product that is priced so high that most buyers can't afford it. There are questions, too, about whether it can keep its order books full, or whether the number of people who crave electric cars is limited.

CEO Elon Musk has noted the affordability problem and said he hopes to create a mass-market Tesla, but that it is still three or four years away.

Tesla sold 4,900 electric cars over the first three months of the year compared with 4,244 Chevrolet Volts and 3,539 Nissan Leafs over the same period. Musk said Tesla's gross profit margin should increase to 25% by the end of the year. In contrast, Ford's first-quarter profit margin in North America hit 11%, a result that both the company and analysts thought was a sign of strength.

"It has many of the elements of a tech stock," said Jeremy Anwyl, vice chairman of Edmunds.com. "(Investors) are making a bet on Elon. Wall Street was enamored with the cult of personality."

For the year, Tesla expects to deliver about 21,000 cars, slightly better than its previous guidance of 20,000. And to hear him talk about it, Musk hardly sounds concerned about enough orders for his car.

"We haven't really tried to push volume super hard yet," Musk said. "I think you have to make sure the house is in order … before you push volume."

But competition in the plug-in luxury car field is coming, and it could cut Tesla's volumes.

GM plans to introduce the Cadillac ELR, a luxury extended-range electric coupe based on the same technology as the Volt, in January or February, Cadillac spokesman David Caldwell said. The Volt starts at $40,000, meaning the ELR could be in the $60,000 range.

In addition to cars, Tesla now makes money by selling zero-emission vehicle credits to other automakers. California requires automakers selling more than 60,000 vehicles a year — currently the six largest brands — to offer zero-emission cars. If they can't sell enough of them, or don't want to, they can buy credits from other automakers.

Sales from those credits were $68 million in the first quarter, or 12% of Tesla's revenue.

The state said that does not taint Tesla's results. "This success is not being subsidized by other car companies," said Stanley Young, spokesman for the California Air Resources Board. "Car manufacturers are not required to purchase credits, nor does ARB establish a price."

Snavely and Bomey write for the Detroit Free Press.