An updated edition of the June 27, 2025 article.
Electric and self-driving cars are reshaping the auto industry. According to the latest report on global EV outlook by International Energy Agency, electric vehicle (EV) sales are expected to jump 25% in 2025, topping 20 million units worldwide. This surge comes as battery prices fall and EVs become more affordable. China is set to dominate, accounting for nearly two-thirds of all sales, followed by Europe and the United States. By year-end, one in every four cars sold could be electric. China also leads in choice—almost 60% of models available there are electric, compared with just 12% in the United States.
A few years back, an “electric car” was practically synonymous with Tesla TSLA. But the field has now become crowded. Concerns over climate change and big gains in battery range and charging speeds are making EVs more appealing. Legacy automakers like General Motors GM are going all-in on electrification. Startups such as Rivian Automotive RIVN are also gaining ground. Meanwhile, Chinese brands are flooding the market with a wide range of models and looking to expand globally.
The autonomous vehicle (AV) market is also speeding ahead. Valued at about $1.9 trillion in 2023, it’s expected to soar to over $13.6 trillion by 2030, at an impressive 32% CAGR, per Fortune Business Insights. Advances in artificial intelligence, machine learning, sensors and connectivity are making AVs smarter and safer. Better perception, faster decision-making and more reliable systems are moving us closer to a world where cars can drive themselves with minimal human input.
For drivers, this shift promises cleaner, greener transportation—and maybe the end of stressful commutes. For investors, it’s one of the most dynamic areas in the market. Our Electric Vehicles & Autonomous Driving Screen will help you identify companies with strong potential in this high-growth sector. Stocks like QuantumScape Corp. QS, Lucid Group LCID and XPeng Inc. XPEV are worth watching as the race toward an electrified, autonomous future accelerates.
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QuantumScape: A decade ago, QuantumScape set out on an ambitious mission—to build the kind of battery that could unlock the full potential of EVs. Not just a small improvement over today’s lithium-ion cells, but a leap forward in energy density, charging speed and safety. The answer, they believe, lies in solid-state lithium-metal technology.
One of QuantumScape’s biggest allies in this journey is Volkswagen. The German auto giant, through its battery arm PowerCo, has been backing the company for years. And last month, that relationship deepened. The two announced an expanded collaboration to accelerate development of the QSE-5 battery and set up a pilot production line in San Jose. As part of the deal, PowerCo will provide up to $131 million in milestone-based payments over the next two years—on top of the $130 million already tied to a future licensing agreement. Volkswagen isn’t just investing; it’s likely to be QuantumScape’s first customer.
That fits neatly into QuantumScape’s capital-light strategy. Instead of building massive, capital-intensive factories, the company plans to license its technology to automakers and battery producers—letting them handle the heavy lifting of manufacturing at scale.
The company also hit a key milestone in June with its Cobra separator process. Cobra replaces the older Raptor system and is a game-changer: 25 times faster, more compact and far more cost-efficient. In the race to bring solid-state batteries to market, that matters.
With B1 sample production on the horizon and early field tests planned for 2026, QuantumScape is inching closer to turning its vision into a commercial product—one that could help shape the future of electric mobility. QS stock currently carries a Zacks Rank #2 (Buy).
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Lucid: When Lucid burst onto the EV scene, it made waves with the Air sedan—a sleek, high-performance luxury car. Now, the company has moved beyond its luxury Air sedan with the Gravity SUV, targeting the broader premium SUV market. CEO Peter Rawlinson believes Gravity could be a game-changer, pointing out that its addressable market is six times larger than that of Air.
To support that growth, Lucid is locking in key parts of its supply chain. A new multi-year deal with Graphite One secures U.S.-sourced natural graphite—an important step toward building a localized, resilient EV materials network.
Lucid operates at the top end of the market, with Air starting above $70,000 and Gravity just under $80,000. But the company is also making ownership more appealing. Effective July 31, 2025, Lucid vehicles have become compatible with Tesla’s Supercharger network, giving drivers access to over 23,500 charging stations across North America. That’s a major convenience boost and would help drive more Air sales.
Lucid is also pushing into autonomous mobility. In a major deal with Uber, the company will supply more than 20,000 vehicles equipped with Nuro’s self-driving tech. Uber has sweetened the partnership with a $300 million investment—both a financial cushion and a built-in sales channel as Lucid EVs join Uber’s global fleet.
On the software side, Lucid rolled out over-the-air updates, with new driver-assist features late last month. And with the backing of Saudi Arabia’s Public Investment Fund, which has invested around $9 billion since 2018, Lucid has the financial muscle to keep its ambitions on track. LCID currently carries a Zacks Rank #3 (Hold).
XPeng: In China’s fast-moving electric vehicle market, XPeng is emerging as one of the most exciting names to watch. Riding the wave of booming new energy vehicle (NEV) sales and strong government backing, the company is scaling rapidly.
XPeng’s strategy centers on intelligence-driven cars built for tech-savvy buyers. Its lineup is diverse, covering everything from sleek sedans to family-friendly SUVs. Standouts include the G9, a roomy mid-to-large SUV; the P7i, a sporty sedan; the G6, a coupe-style SUV; and the seven-seat X9 MPV. The value-priced MONA M03 is aimed at budget-conscious buyers, while the P7+ caters to families looking for style and space.
In June, XPeng added G7, a crossover positioned between G6 and G9. It’s the first model to feature XPeng’s in-house Turing AI chip, which delivers triple the computing power of standard smart driving chips. That gives G7 a serious advantage in self-driving performance—one that could help XPeng stand out in a crowded field.
The sales numbers tell an equally compelling story. In 2024, XPeng delivered more than 190,000 vehicles, up 34% year over year. But 2025 has taken growth to another level. The first quarter alone saw 94,008 deliveries—a staggering 331% increase from a year earlier. In the second quarter, XPeng smashed records again with 103,181 cars sold, more than double its year-ago numbers.
Innovation is moving just as fast. The company’s AI-powered Hawkeye Vision System and XOS 5.4 operating system push its full-stack smart driving ambitions forward. And XPeng is already experimenting with futuristic concepts like flying cars and humanoid robots—signaling that it’s thinking well beyond today’s roads. Once considered an underdog, XPeng is now racing toward the front of China’s EV pack. XPEV currently carries a Zacks Rank #3.
This article originally published on Zacks Investment Research (zacks.com).
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