Top Stocks Set to Benefit From Rising EV and AV Adoption

Electric vehicles (EVs) are moving rapidly into the mainstream as advances in battery technology extend driving ranges, charging infrastructure expands and ownership costs become more attractive. Elevated fuel prices, partly driven by geopolitical tensions in the Middle East, have further strengthened the economic appeal of EVs. The competitive landscape has also evolved dramatically. Tesla TSLA, once the clear leader in the EV market, now faces growing competition, especially from Chinese automakers.

The industry's growth outlook remains compelling. According to the International Energy Agency, global EV sales climbed 20% year over year to more than 20 million units in 2025, representing about one in four new vehicles sold worldwide. Sales are projected to rise to 23 million units in 2026, accounting for nearly 28% of global new-vehicle sales. Europe is expected to be among the fastest-growing regions, with EVs approaching one-third of new car sales, while China is on track for electric vehicles to account for nearly 60% of total vehicle sales.

Beyond electrification, autonomous driving is emerging as the next major growth engine. Rapid advances in artificial intelligence, sensors, cameras and connected-vehicle technology are making self-driving systems increasingly capable. According to Fortune Business Insights, the global autonomous vehicle market is projected to grow from $3.36 trillion in 2025 to $4.44 trillion in 2026 and reach $41.75 trillion by 2034, reflecting a CAGR of 32.3% between 2026 and 2034. Industry leaders such as Alphabet's GOOGL Waymo and Baidu are at the forefront of this technological shift.

For investors, EVs and AVs represent a strong long-term opportunity. They combine growth, innovation and rising demand. Our Electric Vehicles & Autonomous Driving Screen highlights companies positioned to benefit from these trends, including NIO Inc. NIO, Mobileye Global Inc. MBLY, Hesai Group HSAI and Ouster OUST.

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4 Stocks to Buy

NIO: It appears to be entering a stronger phase of its growth journey, supported by rising deliveries, an expanding product portfolio and improving operational execution. After years of heavy investment, the Chinese EV maker is beginning to see the benefits of its efforts as newer models gain traction and demand improves.

A major catalyst is NIO’s broader vehicle lineup. The strong market reception of its flagship ES8 and ES9 models has helped drive delivery growth, while its Onvo and Firefly sub-brands are allowing the company to reach a wider range of customers across different price segments. This diversified approach could help NIO expand its addressable market and strengthen its competitive position.

At the same time, NIO is making progress on profitability. Management’s focus on a more decentralized operating structure is helping improve cost control and capital allocation. These initiatives are translating into stronger vehicle margins.

NIO’s battery-swapping ecosystem remains a key differentiator, with nearly 4,000 swap stations and a broad charging network enhancing customer convenience. Additionally, monetizing advanced driver assistance features through subscription services could unlock recurring, higher-margin revenue streams over time. With improving fundamentals and a Zacks Rank #2 (Buy), NIO is positioned to benefit from the continued expansion of the EV market.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Mobileye: As the automotive industry moves toward autonomous driving, Mobileye is well positioned to benefit from rising demand for advanced driver assistance systems (ADAS) and next-generation mobility solutions. The company’s broad technology portfolio, including Supervision, Chauffeur, Drive and its EyeQ platform, strengthens its position as automakers increasingly integrate smarter safety and autonomous features into vehicles.

Mobileye’s core EyeQ business continues to benefit from higher camera-based ADAS adoption, customer wins and growing exports from Chinese automakers. The company is also expanding into higher-value solutions, with a new high-volume Cloud-Enhanced ADAS program from Stellantis expected to begin in 2027. This offering is expected to generate significantly higher gross profit per unit compared with base ADAS, while Surround ADAS could further support average selling price growth beginning in 2028.

Beyond ADAS, Mobileye is advancing its autonomous mobility ambitions through strategic partnerships. Its collaboration with Volkswagen remains a key pillar, with MOIA beginning public rider testing in Hamburg and commercial deployments targeted in Orlando and Los Angeles over the next few years. The company is also developing a vertically integrated autonomous service platform for launch in at least one U.S. city in 2027.

Supported by strong financial flexibility and solid fundamentals, Mobileye, which carries a Zacks Rank #2, is positioned to capitalize on the future of intelligent transportation.

Hesai: As vehicles progress toward Level 3 autonomy, demand for high-performance sensing systems is expected to rise, creating significant growth opportunities for Hesai. Strong momentum in the ADAS market bodes well for the company. Hesai expects lidar shipments to nearly double to 3-3.5 million units in 2026, following record shipments of 1.6 million units in 2025.

The transition toward multi-lidar vehicle architectures could further expand the opportunity for this Zacks Rank #2 company, as automakers deploy multiple sensors per vehicle to enhance safety and autonomous capabilities.

At the 2026 Beijing Auto Show, Hesai’s lidar technology was featured across 56 vehicle models from 24 automotive brands, the highest among lidar suppliers. The company’s solutions are already used by leading automakers such as Audi, BYD, Xiaomi, Li Auto and Cadillac, while additional multi-lidar design wins with Li Auto, Xiaomi and Changan provide visibility into future growth.

International expansion adds another growth avenue, with partnerships such as Mercedes-Benz for Level 3 autonomous vehicles in Europe and China, along with its entry into Japan through GAC Toyota. The launch of Picasso, the industry’s first 6D full-color lidar chip, and the upcoming ETX platform are expected to support broader adoption from 2027 onward. Hesai’s technology leadership positions it well to benefit from the long-term shift toward autonomous mobility.

Ouster: It is positioning itself as a broader sensing and perception platform provider. While lidar remains central to its technology, the company has evolved beyond a traditional hardware business by combining lidar sensors with cameras, AI computing, perception software and proprietary AI models. This gives Ouster exposure to multiple high-growth markets, including autonomous vehicles, robotics, drones, smart infrastructure and humanoid robots.

A key catalyst is the company’s REV8 platform, which strengthens its competitive position in next-generation sensing. Launched in 2026, REV8 is the industry’s first native color lidar platform, offering improved resolution, longer range, enhanced safety capabilities, greater scalability and lower production costs compared with previous generations. Its compliance with the Build America, Buy America (BABA) Act also creates opportunities in federally funded U.S. infrastructure projects.

Early adoption trends are encouraging, with partnerships involving companies such as NVIDIA, FieldAI, Gecko Robotics, Fujifilm and ARGUS Interception highlighting demand across diverse applications. Ouster is also scaling production through an expanded manufacturing partnership with Benchmark Electronics, supporting annual capacity of more than 100,000 REV8 sensors under a long-term production agreement.

With its broader Physical AI strategy, growing ecosystem of partners and expanding commercial opportunities, Ouster, carrying a Zacks Rank #2, is positioned to benefit from the increasing need for intelligent sensing solutions.

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This article originally published on Zacks Investment Research (zacks.com).

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