Deutsche Bank maintained a Hold rating on Tesla Motors (NASDAQ: TSLA) with a price target of $220. Analyst Rod Lache noted three takeaways from its Q2 report.

"1) Management indicated that demand continues to outpace (rising) supply, and this situation is not likely to change any time soon as Tesla launches the Model X SUV, and they the company increases distribution over time," said Lache.

"2) The company’s growth trajectory (in 2015, 2016, 2017) suddenly appears to be much steeper than we anticipated. Management indicated that they expect to exit 2014 at a 50k unit annualized run rate, and they expect to exit 2015 at a 100k unit annualized run rate. These targets imply that our volume forecasts for 2015, 2016, and 2017 (51k, 60k, and 83k) are likely too low. We estimate that every 10k unit variance vs. our estimate could add $300MM to gross profit (though we’d note that Tesla’s operating expenses are also trending higher, which could mitigate near term upside)," he continued.

"3) Possibly the biggest was that Tesla believes battery pack costs can fall below $100/kWh in “much less than 10 yrs”. If true, such a development could have broad implications for Tesla and for the broader Auto Industry, as it would imply an outright cost advantage for Tesla’s EV’s vs. internal combustion alternatives. We note that the conventional internal combustion powertrain typically costs OEMs >$5,000 per vehicle. And this cost is expected to double over the next 10-years (per the National Academy of Sciences, U.S fuel economy targets will add $5,000 in cost). For comparison, Tesla’s 200 mile range Model 3 is expected to have a 48 kWH battery pack; a $4800 cost at $100/kWh. Even if we add in the current cost of inverters, e motors, and other EV specific equipment, the cost of an EV Powertrain should be well below $5500," he added.

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Shares of Tesla Motors closed at $223.30 yesterday.