Nio shares surge as much as 13% after getting a host of bullish Street calls on its new sedan to rival Tesla

Published Mon, Jan 11 20218:49 AM ESTUpdated Mon, Jan 11 20219:53 AM EST

(This story is for CNBC PRO subscribers only.) Shares of Shanghai-based electric vehicle company Nio opened at a record high on Monday after the company unveiled its first sedan, prompting a number of Wall Street firms to raise their outlook for the company. Analysts from Bank of America and Deutsche Bank raised their target on the stock to $70, while JPMorgan lifted its target to $75 — the highest on the Street. All three have a buy-equivalent rating on the stock. U.S.-listed shares of Nio jumped as much as 13% on Monday shortly after the open, before giving back some of those gains. The stock last traded roughly 8% higher, after closing at a record high on Friday, rising nearly 21% for the week. On Saturday the company unveiled its first sedan , called the et7, which includes self-driving technology features that the automaker claims will surpass that of Tesla. Deliveries are set to begin in the first quarter of 2022, company founder and chairman William Li said at a launch event in Chengdu, China. Nio's et7 sedan can work with the company's new autonomous driving system that's built on Nvidia processing chips. In a note titled "three big steps forward" JPMorgan, which has an overweight rating on the stock, said it believes Nio "will continue to trade more like a fast-growth technology/EV stock than a carmaker." Analyst Nick Lai pointed to several factors that should drive adoption, including Nio's in-house autonomous driving solution, as well as the solid-state battery for the new model. Additionally, he noted users' option to pay for autonomous driving on a monthly basis is the beginning of content monetization for Nio. "This is a significant milestone in that carmakers won't rely on just manufacturing and aftermarket business in the future to generate profits, with content monetization playing an increasing role – similar to the smartphone industry today, suggesting future cars will be like smartphones with wheels," he said. Lai's prior target stood at $50. Bank of America, which previously had a $59 target on the stock, said Nio's advanced product and technology should improve brand equity and boost volume sales. The firm also pointed to Nio's sales channel expansion, and said that continuous new model launches should drive share gain. Nio's new sedan claims a driving range of 1,000 kilometers (621 miles), as well as a laminated all-glass roof, heated seats in both rows and 23 speakers, according to the company. Deutsche Bank analysts led by Edison Yu said the new model is targeting the large premium sedan market, which is currently dominated by German luxury automakers. Following this initial entry, Nio should then be able to make a lower priced and higher volume mid-size sedan next year, Yu said. "Overall, we think achieving all these targets will without a doubt be challenging but believe NIO is among the best positioned to do so," he wrote in a note to clients. His prior target was $50. Once on the brink of bankruptcy, Nio has been hailed by some as the Tesla of China. After receiving roughly $1 billion from state-backed investors in early 2020, Nio's shares climbed higher throughout 2020, with the stock ultimately closing out the year with a more than 1,000% gain. But like with other electric vehicle companies, Nio's sales still lag traditional automakers. For 2020, Nio said deliveries more than doubled from a year ago to 43,728 vehicles. Deutsche Bank's Yu said he envisions Nio selling more than 300,000 unites by 2025. That made the automaker the best performer among other New York-listed Chinese electric car start-ups. But Nio's deliveries still fall short of BYD, a Chinese car and battery company backed by Warren Buffett, Tesla, which delivered 499,550 vehicles in 2020. - CNBC's Michael Bloom and Evelyn Cheng contributed reporting.

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(This story is for CNBC PRO subscribers only.)

Shares of Shanghai-based electric vehicle company Nio opened at a record high on Monday after the company unveiled its first sedan, prompting a number of Wall Street firms to raise their outlook for the company.

Analysts from Bank of America and Deutsche Bank raised their target on the stock to $70, while JPMorgan lifted its target to $75 — the highest on the Street. All three have a buy-equivalent rating on the stock.

U.S.-listed shares of Nio jumped as much as 13% on Monday shortly after the open, before giving back some of those gains. The stock last traded roughly 8% higher, after closing at a record high on Friday, rising nearly 21% for the week.