Nio Inc. American depositary receipts jumped more than 5% Tuesday after Deutsche Bank said the Shanghai-based electric-car maker commands loyalty in China and is on track to develop an autonomous car in the next couple of years. Analyst Edison Yu started covering Nio’s ADRs at a buy rating earlier this month, and said in a note Tuesday that the “main pushback” on that bullish view was that Nio’s brand “does not create the same level of excitement and loyalty” in China as Tesla Inc. and German luxury auto makers. “While there is some truth to that given Nio is an upstart, we continue to see compelling evidence that Nio is increasingly perceived by customers as a high-quality premium brand with best-in-class technology and service,” Yu said. Investors also expressed concerns about Nio’s autonomous-car technology, where local competitor XPeng Inc. “appears to be taking a lead,” he said. “We expect Nio to officially unveil its all-electric sedan later this year (EE7) with a revamped hardware sensor suite that will enable L4 autonomy by 2022, which should alleviate concerns about the R&D roadmap,” Yu said. Shares of Nio have gained 390% this year, which compares with a 3.4% advance for the S&P 500 index.
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