The electric vehicle (EV) market has grown rapidly over the past few years, despite the impact of sticky inflation, elevated interest rates, tariffs, and other macroeconomic headwinds that have rattled the global economy. While the North American EV market has cooled off a bit from its initial growth spurt, the Chinese and European markets continue to generate strong tailwinds for the broader industry.
According to Grand View Research, the global EV market could grow at a CAGR of 32.5% from 2025 to 2030 as cheaper and more power-efficient vehicles hit the market. To capitalize on that secular trend, investors should add a few promising EV plays to their portfolios. Here are two EV stocks that deserve a chance: Nio (NIO +2.47%) and QuantumScape (QS 1.57%).
Image source: Nio.
Nio
Nio is a major producer of EVs in China. It differentiates itself from its competitors with swappable batteries, which can be quickly swapped out at its Power Swap stations as a faster alternative to traditional chargers. Its namesake banner sells a wide range of sedans and SUVs. Its newer Onvo and Firefly sub-brands sell cheaper SUVs and compact cars, respectively.
From 2020 to 2024, its annual deliveries increased more than fivefold, rising from 43,728 vehicles to 221,970 vehicles, while its annual revenue more than quadrupled. It achieved that explosive growth even as the pandemic, macro headwinds, and a pricing war rattled China's EV market.
NYSE: NIO
Key Data Points
Nio's vehicle margin declined to the single digits in 2023 as it navigated those challenges. Still, it rebounded to double-digit levels over the past two years as it sold a higher mix of Nio's premium sedans, reduced its production costs, and streamlined its other expenses.
From 2024 to 2027, analysts expect Nio's revenue to grow at a CAGR of 31% as it significantly narrows its net losses. That growth should be driven by its rising sales of Onvo and Firefly vehicles, its gains in domestic market share, and its ongoing expansion into Europe. It could also spin off its capital-intensive battery manufacturing division to streamline its spending.
That's a bright outlook for a company that trades at less than one times this year's sales. Its valuation is still being squeezed by the tariffs and trade conflicts between the U.S. and China, but it could attract a stampede of bulls once those headwinds dissipate.
QuantumScape
QuantumScape is a leading developer of solid-state lithium-metal batteries, which generate electricity from solid electrolytes instead of the flammable liquid electrolytes used in traditional lithium-ion batteries. That difference grants solid-state batteries better thermal resistance, faster charging times, and higher charging capacities than their lithium-ion counterparts.
However, solid-state batteries are also more challenging and expensive to manufacture. That's why they've only been mass-produced for smaller devices like pacemakers instead of EVs.
NASDAQ: QS
Key Data Points
QuantumScape aims to break that bottleneck with its QSE-5 batteries for EVs, which boast an energy density of 844 Wh/L (watt-hours per liter) and can be quickly charged from 10% to 80% in 12 minutes. Most lithium-ion batteries for EVs have an average energy density of 300-700 Wh/L with an average fast charging time of 20 minutes to an hour.
QuantumScape's batteries could make EVs significantly more energy-efficient, but the company has not yet commercialized any of its designs. It has run numerous road tests with its top investor, Volkswagen (VWAP.Y 0.09%), and recently upgraded its separator process to produce higher-volume samples; however, it isn't expected to generate any meaningful revenue in 2025.
But from 2026 to 2027, analysts expect QuantumScape's revenue to rise from $6 million to $57 million as it finally starts licensing its designs to Volkswagen and other major automakers. From 2025 to 2030, Grand View Research expects the solid-state battery market to grow at a CAGR of 56.6% -- so QuantumScape still has plenty of room to grow. It's still a volatile and speculative stock that is difficult to value, but it might be worth nibbling on as the EV market continues to heat up.
