Nio shares rise on backing from top investor in Tesla

Chinese electric carmaker Nio Inc's shares soared by over 22 percent on Tuesday, right after top Tesla Inc investor Baillie Gifford & Co disclosed an 11.4 percent stake in the company.

Baillie Gifford & Co, Tesla's second-largest shareholder, said in a filing with the US Securities Regulatory Commission on Tuesday that it owns 85.3 million shares of Shanghai-based Nio. The news rallied Nio's share price, which closed at $7.39 per share, rising from $6.19.

Analysts said the surge shows investors are optimistic about the company's potential, although Nio still faces many challenges in the cutthroat new energy vehicle market, especially after its IPO last month.