What happened

Shares of Chinese electric-vehicle maker NIO (NIO -1.81%) were rising on Wednesday, following bullish comments from analysts at Morgan Stanley and Citibank. 

As of 11:15 a.m. EDT, NIO's American depositary shares were up about 10.3% from Tuesday's closing price.

So what 

In a new note on Wednesday morning, Morgan Stanley analyst Tim Hsiao upgraded NIO to overweight, from equal weight, and raised the bank's price target for the stock to $20.50 from $12. For reference, NIO was trading at $19.65 as of 11:15 a.m. EDT.

Hsiao wrote that recent funding injections from economic-development authorities in China's industrial heartland have improved the company's access to credit, which in turn should make it much more competitive, financially speaking, with rival automakers. 

Hsaio also conceded that he had previously underestimated the potential benefits of NIO's closer engagement with government players, and of the company's new plan to offer batteries by subscription.  

A NIO automated battery-swap station.

NIO is now offering "batteries as a service." Buyers can choose to purchase a NIO without a battery, instead subscribing to the company's automated battery-swap service. Image source: NIO.

Hsaio's upgrade was probably the main factor driving NIO's shares higher on Wednesday morning, but it wasn't the only one.

Now what

In his own note on Wednesday, Citibank analyst Jeff Chung raised the bank's price target for NIO's shares to $18.10, from $16, while maintaining a neutral rating. 

Chung wrote that he has become more positive on NIO's medium-term outlook after a call with the company's management team. He thinks NIO's production ramp-up and its battery-subscription plan (which lowers the up-front cost of its vehicles) make it easier for auto investors to see how sales volumes will likely grow over the next few years. 

Chung now sees NIO selling about 81,000 vehicles in 2021, 134,000 in 2022, and 172,000 in 2023, all up from his earlier estimates.