Tesla is trading at a two-month low amid softening demand for electric vehicles, but an analyst with CFRA Research has still identified the carmaker as one of three stocks to buy in the automotive sector.

Garrett Nelson, vice president and senior equity analyst at CFRA, told BNN Bloomberg that the EV market is still growing despite concerns about waning consumer interest.

“EV market share is increasing. It was about 7.6 per cent of all new vehicles sold in the U.S. last year, up from 5.9 per cent a year earlier,” Nelson said in a Monday television interview.

“(Tesla) is still the 800-pound gorilla in the space, accounting for 55 per cent of all EVs sold in the U.S. last year, and we’re very confident in the Cybertruck, where the reservation count is the highest in the industry of any forthcoming EV model.”

In addition to Tesla (TSLA NASDAQ), Nelson recommended AutoNation (AN NYSE) and O’Reilly Automotive (ORLY NASDAQ) as his top picks in the auto sector.

Nelson, his family, his clients and his firm do not own any shares of the stocks listed above, and none of the companies mentioned are investment banking clients at his firm.

For the full interview, click on the video at the top of this article.