Goldman Sachs analyst Fei Fang upgraded NIO Inc. (NIO) to Neutral from Sell with a price target of $59, up from $7.70.

The stock closed Monday down $3.47 to $50.53.

The analyst admits to underestimating the benefits to NIO from powertrain breakthroughs, the introduction of its battery as a service program, and regulatory incentives that turned around electric vehicle market demand from an ongoing decline. Combined, all of these factors have provided "significant tailwinds" to NIO's sale volumes, Fang tells investors in a research note. The analysts expects an increase in electric vehicle penetration from 5% this year to 20% in 2025. Fang upgraded NIO to reflect the long-term growth now expected.