What happened

Shares of Chinese electric-vehicle maker NIO (NIO -4.48%) were moving higher on Wednesday, driven by heavy options trading a day after a bullish note from a key Wall Street analyst. 

As of 12:30 p.m. EDT, NIO's American depositary shares were up about 3.4% from Tuesday's closing price.

So what

In a note released on Tuesday morning, Deutsche Bank analyst Edison Yu reiterated his buy rating and $24 price target on NIO's shares with some new and bullish commentary. 

A blue NIO EC6, a sporty upscale electric crossover SUV.

Deliveries of NIO's latest model, the EC6 crossover, began earlier this month. Image source: NIO.

Writing in response to concerns that NIO's brand isn't yet as strong as those of Tesla and the German luxury-car makers, Yu said that's true -- but argued that NIO is on track to draw similar levels of excitement and consumer loyalty in time.

Yu argued that there's "compelling evidence" of a growing number of Chinese consumers who see NIO as a brand with top-level customer service and technology. Sixty-two percent of new NIO buyers are referred by NIO owners, he wrote -- a high rate -- and the brand's quality appears to have improved significantly since a costly recall in 2019. 

Now what

While NIO may not yet be on Tesla's level, Yu sees it as the leader of a peer group that includes Xpeng, Li Auto, and privately held WM Motor, all of which have entered upscale auto segments with technology-packed "new energy" vehicles. ("New energy vehicles" is China's catchall term for gasoline-electric hybrids, battery-electric vehicles, and vehicles powered by hydrogen fuel cells.) 

Yu's note seems to have triggered strong investor interest in NIO's shares, and in call options (which allow holders to buy shares at a set price and time). Heavy trading in bullish call options that are set to expire on Friday may have given NIO's stock price an added boost on Wednesday morning.