Shares of U.S.-listed Chinese EV maker Nio went down by more than 11 percent in early market trading after Goldman Sachs turned bearish on the company.

Goldman Sachs analyst Fei Fang, who kept his share-price target at $7, downgraded Nio to sell from neutral on valuation concerns.

Nio's 85% rally in the past month represents “over-optimism,” Fang wrote in a report. That's because the surge wasn't accompanied by significant increases for volume and profit forecasts.

"The current share price reflects over-optimism given no substantial changes to volume/profit expectations," he wrote.

Over the long term, Fang said he believes Nio's investment case depends on the optionality for China's structural auto premiumization and EV adoption, combined with the scarcity of being China's first home-grown high-end passenger vehicle brand.

Fang's recommendations have produced a negative 5% return in the past year, compared with a 292% return on the shares, according to Bloomberg. He has rated Nio neutral twice and buy twice in the past 16 months.

Nio (NYSE: NIO) delivered 3,740 vehicles in June and 10,331 in the second quarter. The second-quarter figure was more than double the first-quarter figure.

For the first half of the year, deliveries totaled 14,169.

It delivered 2,476 ES6s, the company's 5-seater, and 1,264 ES8s, the six- and seven-seater models.

Last Friday, Nio China received a 10.4 billion yuan ($1.48 billion) credit facility from six Chinese banks, further strengthening its financial status.

The six banks - Bank of China, Agricultural Bank of China, Industrial and Commercial Bank of China, China Construction Bank, China I Industrial Bank and China Merchants Bank, and Nio China held a signing ceremony for the strategic cooperation.

According to the agreement, the banks will provide Nio China with a comprehensive credit line of RMB 10.4 billion to support Nio China's business operations and development.

Nio shares went down by 11.28 percent to trade at $11.48 in early market trading in the US.