Tesla Motors held its annual meeting on Wednesday, and the company’s comments have been the talk of Wall Street for the last couple of days. CEO Elon Musk talked about the Model X and their new Powerwall and Powerpack energy storage systems.

Tesla Motors Inc (TSLA) Reports Rise In Model S Demand

However, he also made some comments about demand for the Model S, and those comments have sort of flown under the radar.

Tesla Model S comments underplayed

Deutsche Bank analyst Rod Lache and his team pointed out that Tesla Motors Inc (NASDAQ:TSLA) management said about a third of the recent Model S orders were for the 70D Model. That’s the newest version of the Model S, which features a range of 240 miles and starts out at $75,000 before government incentives.

Many have assumed that the interest in the 70D is cannibalizing the other Model S demand, but Lache reports that this doesn’t seem to be the case. The analyst met with Tesla Motors Inc (NASDAQ:TSLA) management following the meeting and said that the majority of the 70D orders seem to be incremental. In other words, it doesn’t appear as if the orders for the 70D are reducing the orders for the other Model S sedans.

50% increase in Model S run rate

According to the Deutsche Bank team, this suggests that Tesla Motors Inc (NASDAQ:TSLA) is seeing a 50% increase in orders compared to the run rate the EV manufacturer reported in the first quarter. Lache thinks the 70D model has expanded Tesla’s total addressable market to include customers who would usually buy a BMW 5-Series or Mercedes E-Class.

As a result, he states that investors should now be less concerned about demand for the Model S, as some previous reports have suggested that demand for the car is waning. Further, he thinks the concerns about the 70D being dilutive to Tesla’s average selling prices and margins are alleviated by this detail.

How many Model X crossovers will Tesla sell?

Tesla Motors Inc (NASDAQ:TSLA) management also said on Wednesday that they expect to start delivering the first Model X orders within the next three to four months. The Deutsche Bank team is currently estimating a third quarter delivery time frame for the first Model X crossovers. Other analysts are expecting that deliveries won’t start until the fourth quarter. Lache estimates that Tesla will deliver 7,000 units of the Model X this year.

Interestingly, Deutsche Bank has a $245 per share price target on Tesla Motors Inc (NASDAQ:TSLA) but rates the stock as a Buy. As of this writing, shares of Tesla were down 0.16% at $251.01 per share, putting the firm’s price target underwater compared to its Buy rating. It would seem that it’s time for Deutsche Bank to either downgrade Tesla or up its price target.