The shares of Chinese electric vehicle (EV) maker Nio (NYSE: NIO) rose by more than 8 percent in pre-market trading on Wednesday after JP Morgan's bullish rating.

The Wall Street bank raised their price target on Nio sharply to $40 in a report released on Wednesday. Nio shares closed at $21.62 on Tuesday, and JP Morgan's price target means Nio has 85% upside potential.

JP Morgan's last rating on Nio was Neutral and was made on June 21, when the price target was $14.

In its latest report, JP Morgan gave Nio an Overweight rating and admitted that "we missed the stock's major rally YTD."

The report said Nio remains attractive from a long term perspective.

The latest rating comes as Chinese State media Xinhua praised Nio, saying the company's user-oriented model gives it unique business logic.

From personalizing production according to user preferences, to driving technological upgrades in the industrial chain according to user needs, to having large events voted on by users, Chinese electric vehicle (EV) maker Nio (NYSE: NIO) has gained a unique set of business logic by being user-oriented, Chinese state-owned media Xinhua said in an October 12 article.

According to the article, the technology behind allowing users to define the company's model is a technology that requires strong flexible production capabilities, in addition to system integration of hardware and software with data algorithms, which is another key.