An employee fits a battery pack under a Tesla Model S automobile on the final assembly at the Tesla Motors factory.

Credit Suisse thinks Tesla's focus on its electric vehicle batteries, both in development and production, is a key advantage for Elon Musk's company over other automakers.

"While we hold an Underperform rating on Tesla, we nevertheless believe it's important to give Tesla its credit where due," Credit Suisse analyst Dan Levy wrote in a note to investors Monday. "We believe Tesla is leading in the areas that will likely define the future of carmaking – software and electrification."

Tesla shares rose 6.45% to $381.50 a share on Monday.

The firm has a notably pessimistic view of Musk's company, with a $200 price target that represents the expectation that Tesla's stock will drop 44% from its current price of nearly $360 a share. While Credit Suisse did not budge on its rating or price target, Levy said he and his team visited Tesla's Gigafactory 1 in Nevada and came away impressed by the company's battery strategy.

"Tesla is likely ahead of others on batteries – the core of the electric powertrain," Levy said.