Tesla will thrive in the world’s largest auto market, according to one Wall Street firm.

Piper Jaffray reiterated its overweight rating for Tesla shares, saying the company’s electric car quality is far ahead of its peers in China.

“After meeting with an electric vehicle (EV) trade group this week in Beijing, we still think Tesla has little to fear from Chinese brands, at least based on the current competitive landscape,” analyst Alexander Potter wrote in a note to clients Tuesday. “Branding and performance are just as important, and in this regard, we think nobody (least of all Chinese OEMs) can compete with TSLA.”

Tesla’s China sales rose to $1.07 billion last year from $319 million in 2015, according to an SEC 10K filing.

Potter reaffirmed his $386 price target for Tesla shares, representing 10 percent upside to Monday’s close.

“Anyone who has taken a ride in a Chinese EV will tell you that, like most other Chinese sedans, these vehicles just aren’t compelling consumer products,” he wrote.

The analyst said China will start an electric vehicle quota system in 2019. Large auto makers will be required to purchase electric vehicle credits for 10 percent of total production that year, increasing to 12 percent by 2020.

“Companies that fail to achieve the quotas will be able to buy credits from companies that exceed the quotas,” he wrote.

Tesla’s stock is up 64 percent this year versus the S&P 500’s 14 percent return through Monday.

The company’s stock fell 1.4 percent Monday after a report it fired hundreds of employees. Its shares are up 0.2 percent shortly after the market open Tuesday.

Some investors are also concerned over the company’s cash burn and ability to meet its Model 3 production goals.