Tesla doesn’t have to play the “zero-sum game” faced by traditional automakers that are struggling to catch up in the electric vehicle space, an analyst at Jefferies told CNBC Thursday.Billionaire Elon Musk’s car company on Wednesday posted its fifth straight quarter of profits, helped in part by sales of environmental regulatory credits to other carmakers. The company also beat on all the key metrics that analysts were looking for including cash flow and gross margins.However, concerns have been raised over its eye-watering valuation. The company’s stock price has skyrocketed over 400% year-to-date and its market cap now stands at $393.8 billion, higher than some of the world’s leading automakers including Toyota and Volkswagen.Despite that “challenging” valuation, Jefferies Managing Director Philippe Houchois said that many incumbent players are still transitioning “from a world of combustion engine cars to electric cars,” which he described as “a bit of a zero-sum game.”Elon Musk, CEO of Tesla, stands on the construction site of the Tesla Gigafactory in Grünheide near Berlin, September 3, 2020.Patrick Pleul | picture alliance | Getty ImagesTraditional carmakers are competing aggressively to convince consumers to buy their electric alternatives.”Tesla is pretty much the only carmaker which is not stuck in that zero-sum game for the next 10 years or so,” Houchois told CNBC’s “Street Signs Europe.” “And that is a big driver of the valuation gap between Tesla and the other car manufacturers.”Houchois added that Tesla will gain an “edge” over other automakers as it’s rethinking “how you can compact and reduce the size of the space that you need to manufacture cars.” Such innovations should “lead to higher profitability but also better profitability than the traditional carmakers,” he said.Tesla also said it’s still on track deliver 500,000 vehicles in 2020, reiterating earlier guidance. While that target is “challenging,” Houchois said that it shouldn’t matter if Tesla’s actual deliveries fall short. “We’re talking about a multi-year story,” he said.Tesla shares were up almost 5% in premarket trading Thursday.