As we move further into 2025, investors are scanning the markets for stocks that can help their portfolio profit. There are plenty of options in the blossoming electric vehicle (EV) industry as the globe transitions from internal combustion engines (ICE) to EVs.
QuantumScape (QS +2.64%) can improve EV batteries in just about every way possible if it finishes developing its solid-state battery technology. And Nio (NIO 4.04%), a leading premium Chinese EV maker, has positioned itself for massive top-line growth in 2025. Both could see their stock prices jump in the year ahead.
From Raptor to Cobra
QuantumScape has always been one of the most intriguing EV investments. If achieved, the company's solid-state battery technology would increase driving range, lessen charging time, improve safety, and lower costs -- a perfect storm of factors. The problem is that it's a big "if," because nobody has accomplished what QuantumScape is attempting.
The good news is that so far the process is going well, and the company has already unveiled its sample product using the Raptor process. Now, the company has announced that next-generation equipment for the next phase of development -- code-named Cobra -- has been delivered, developed, installed, and released for initial separator processing.
All that is a fancy way to say that QuantumScape is on track to deliver higher-volume samples for its first planned commercial product in 2025. This would be a major step toward the commercialization of its solid-state batteries for EVs, and a major factor in convincing investors there's a real future for its technology.
QuantumScape already has the next leg of the race covered with its agreement with PowerCo, the battery manufacturing subsidiary of Volkswagen Group. Upon satisfactory technical progress, PowerCo receives a license to mass-produce battery cells based on QuantumScape's technology in exchange for royalties, including a $130 million prepayment.
If the company executes and delivers higher-volume samples with its Cobra process in 2025, expect the company's stock to jump higher as it inches closer to commercial volume production -- that's when the stock can really reward investors.
NASDAQ: QS
Key Data Points
Doubling up
Nio investors had a lot to catch up on at the end of 2024 with the company's "Nio Day" at the end of December. While the company did have fairly lofty growth expectations at the beginning of its story, the company has largely disappointed with its delivery and top-line growth. But that's about to be a narrative of the past, as Nio prepares to ride its two new brands to serious top-line growth.
Onvo, Nio's second brand, launched in May with production starting in September. Firefly, Nio's third brand, launched in December, and as production accelerates, it will only add incremental sales and deliveries to Nio's already strong figure. In fact, December delivery figures give us a sneak peek of what growth in 2025 could be like.
Data source: Nio press releases. Image source: Author.
Nio expects these two more affordable brands to position well with its premium namesake brand, Nio. With the brands well-positioned to drive sales higher, management expects delivery figures in 2025 to nearly double to roughly 440,000 units.
That level of delivery growth will send Nio's top line soaring, and perhaps it will convince investors there's a long-term growth story here, which would create demand for the stock and close the valuation gap it currently has with competitors. Nio trades at a paltry price-to-sales ratio compared to competitors.
Right now, Nio investors are willing to accept the fact that a brutal price war in China could weigh on margins in the near term, but most important for Nio's stock to move higher in 2025 will be a surge in deliveries and vehicle revenues. Nio is positioned to turn in a strong 2025 that will reward investors.
Two stocks to watch
Ultimately, when you own good businesses, it comes down to having catalysts for the stock price to move higher. Both Nio and QuantumScape have positioned themselves with positive catalysts in 2025, and investors should end up benefiting with a rising stock price.
