Last month, Tesla Motors announced that sales of its Model S exceeded its target of 4,500 units by 250 cars. As a result, "Tesla is amending its Q1 guidance to full profitability, both GAAP and non-GAAP."

Tesla expects to show a profit after two years as a public company building premium electric vehicles. The firm reports its first quarter results on Wednesday.

Tesla looks to sell 20,000 cars this year, recently added a leasing option for the Model S -- and its stock price has been surging of late.

TSLA Stock Price Chart

This is great news for Tesla, Tesla investors, the greentech industry, and electric vehicles.

But it's also important to acknowledge that Tesla's success and its superb execution are intertwined with DOE loan guarantees, cheap factory space at NUMMI, and $250 million in zero-emission car credits.

The Los Angeles Times reports that Tesla is reportedly "sitting on as much as $250 million worth of zero-emission car credits, under a secretive program administered by the state of California."

The program administers credits in units of "grams per mile Non-Methane Organic Gases (g/mi NMOG)," according to the not-so-secret website at the California Environmental Protection Agency

Barclays writes, "Nevertheless, after the sharp run-up in the [Tesla] share price, gross margins -- and the extent to which they may have been boosted by regulatory credit sales -- will be a key focus" (emphasis added).

According to reports, California provides Tesla with $35,000 in Zero-Emission Vehicle Credits that Tesla sells to automakers without a ZEV offering. Tesla receives other state and federal monies as well.

Barclays also writes that the investment bank is "agnostic as to whether Tesla can break into the mass affluent Gen III market, and downright skeptical of its ability to become a true mass-market automaker," adding, "In addition, GAAP revenue and EPS will likely be faced with a headwind from GAAP accounting around the new loan product, which will lead to some revenues being deferred."  

We'll be tuning in to the earnings call tomorrow and will report back soon after.