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Electric vehicles seem to be the future of the automobile industry. In the past year alone, Tesla has experienced off the charts stock performance. Similarly, late last week, California Governor Gavin Newsom issued an executive order stating that by the year 2035, all cars and passenger trucks sold in the state should be zero-emission vehicles. Deutsche Bank confirms that electric cars are here to stay after releasing a report reiterating their Buy rating and price target of $24 for the leading Chinese electric vehicle company, NIO.

Deutsche Bank’s bullish thesis from NIO’s initiation earlier this month has received pushback since investors do not believe the Chinese car manufacturer has the same brand strength as companies such as Audi. Although they acknowledged that NIO is a new brand with low volumes, two studies published show that “NIO is clearly delivering industry-leading customer favorability and reliability.” In one of the studies released by Bitauto, NIO ended up with an overall brand rating higher than both Tesla and BMW.

Another point that concerns investors is NIO’s integration of new technologies into their vehicles. In the last quarter of 2018, NIO cut their R&D division by over 30% which has led investors to believe it is falling behind local competitors such as XPeng. However, analysts at Deutsche Bank believe that NIO is in the process of hiring employees which will allow them to launch their new all-electric sedan (EE7) with technological developments outpacing their competitors.

Finally, NIO is expected to break its quarterly delivery record after tracking 7,500 in the first two months of Q3 with an expected over 4,000 deliveries in September. Similarly, the positive outlook based on vehicle production and sales allowed NIO to lay out a plan where they will buy almost 9% of the government’s stake in the company at below market value.

NIO, despite the concerns of investors, seems to be doing well in the electric vehicle market in China. They are leading competitors in brand strength and will soon be releasing technology that is equivalent if not superior to other automobile brands in their market. Deutsche Bank continues to view them with high potential, let us know what you think in the comments below!

Disclosure: At the time of publication, I have no positions in any of the securities mentioned in this article. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for creating this article (other than from TheStreet) and have no business relationship with any company whose stock is mentioned in this article.