Shares of electric car maker Tesla Motors (TSLA) surged more than 9 percent on Monday after a securities analyst increased her sales projection for the company and upgraded its stock.

The Palo Alto automaker's shares closed at $117.18 up $9.82 or 9.1 percent, from Friday's close.

Investors started buying after Jefferies & Co. analyst Elaine Kwei increased her price target for Tesla to $130 from $70.

In a report to investors, Kwei said the upstart automaker had captured 9 percent of the U.S. full-size luxury sedan market, accounting for nearly all growth in the segment this year on the strength of sales of its Model S sedan.

The Model S is competing well against such vehicles as the BMW 5/7 Series, the Mercedes E/S class, the Audi A6/7/8, and the Porsche Panamera, Kwei said.

"Despite the massive run in the stock, we believe Tesla is one of the best growth stories in the market today and still has upside given the top-line growth," Kwei said.

Tesla has been selling its sport electric car for just about a year. The price starts at $62,400 and climbs to well above $100,000 if a customer springs for a larger battery that extends the vehicle's range.

"We believe Tesla could flex up its stated single-shift production of 20,000 units annually by up to 20 percent," Kwei wrote. She raised her estimate for Tesla's second-quarter sales to 5,000 from 4,500 cars. Kwei raised her full-year sales estimate to 21,500 vehicles from 19,800.