EV Tax Credits Are Ending—Here’s Why These 2 Stocks Could Soar

Understanding the electric vehicle market has become increasingly important over the past several years as EV sales have really started to explode.

Looking forward, EVs are likely to become a larger part of the overall economy, presenting a significant opportunity for investors. The International Energy Agency reported that in 2024, 20% of new cars sold were electric vehicles. They expect this number to grow to 40% by 2030, positioning EVs as a clear growth market. However, the path to this is not likely to be a straight one, especially as government attitudes toward EVs shift.

Take the passing of President Trump’s “One Big Beautiful Bill” for example. It means that the significant tax breaks that come from buying EVs in the United States will expire in September, which will weigh on adoption. Despite this, analysts expect the EV market to grow.

VinFast Auto (NASDAQ: VFS) and Lucid Group (NASDAQ: LCID) stand out as two electric vehicle stocks with high upside potential, positioned to benefit from shifting market dynamics and evolving U.S. policies.

Big Beautiful Bill Increases VinFast’s Chances of U.S. Success

VinFast makes and sells relatively low-cost EVs primarily in Vietnam. The MarketBeat consensus price target on the company is $5.75, implying that shares could rise by nearly 64%. 

Ending the EV tax credit actually helps VinFast. Its vehicles were not eligible to receive it before, putting it at a disadvantage in the U.S. market. Now, the playing field will become more level as domestic companies will no longer receive the credit either.

VinFast's sales in the United States are very limited, comprising only 6.2% of total revenues in 2024. Thus, the United States represents a significant growth opportunity for VinFast that just became easier to capitalize on. However, the company must deal with 25% automotive tariffs, which hurt its competitiveness in the United States.

Still, Vinfast clearly doesn’t need the United States to grow fast. EV deliveries spiked 296% last quarter, while E-scooter deliveries rose 473%. The company is still deeply unprofitable, with a gross margin of negative 35%. However, this figure is a big improvement over its negative 59% gross margin a year ago. VinFast will need to continue making progress here by accelerating production and deliveries to achieve greater economies of scale. The recent opening of the company’s second factory should aid this. The company also just signed with its first authorized dealership in California as it looks to expand its U.S. presence.

Recent Price Targets Indicate +40% Upside in Lucid

The MarketBeat consensus price target on Lucid is $2.68, implying a solid but not huge 27% upside in shares. However, focusing on the stock’s two most recent price target updates paints a considerably more bullish picture. Both come in at $3, which implies 42% upside in shares.

In contrast to VinFast, most of the company’s revenue comes from the United States, accounting for around 73% of its total sales in 2024. The rest of the company’s sales primarily come from Saudi Arabia. The company will no longer be able to benefit from tax credits post-September, but some believe that this will actually help Lucid.

That includes James Picariello of BNP Paribas. He believes that the sunsetting of the credit means that Lucid will face less EV competition. This is because companies that make both EVs and gas-powered vehicles may “deemphasize” their EV ambitions in the United States as government incentives go away. This is plausible, but it is also important to note that companies like Ford Motor (NYSE: F) have invested billions in their EV efforts. Given the long-term growth many see in this market, they are not likely to simply hand over this growth to EV pure plays.

In Q2, Lucid’s vehicle deliveries hit 3,309, rising by 38% compared to the same period a year ago. Like many early-stage EV makers, Lucid remains highly unprofitable. It will need to significantly boost deliveries to change this.

Winning in the United States Is Key to VinFast and Lucid’s Success

VinFast and Lucid are attempting to compete in the crowded U.S. vehicle market. Success will be key to achieving the scale required to be profitable one day. With EV tax credits set to expire soon, shifts in the competitive landscape may help their ambitions, which could help shares achieve the significant upside some analysts see.

All data uses information as of the July 7 close unless otherwise indicated.

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Don’t Miss Out: 3 Blue-Chips Set to Pop This Earnings Season

As we enter a new earnings season, there are several reasons for optimism about the economy. However, potential headwinds remain, causing some investors to focus on what could happen rather than what will or won’t happen.

That’s why investors may take a wait-and-see approach to their investment decisions. Analysts are forecasting an average of 5% year-over-year (YOY) earnings growth for many companies in the S&P 500. There’s good news and bad news in that number.

The good news is that growth expectations have increased in recent weeks, particularly among tech stocks. However, the pace of growth is still expected to be markedly slower than in the prior year.

A key reason for the slowdown is that companies still await certainty around tariffs. The picture has become a little clearer, but until the final numbers are in, companies, analysts, and investors will have a tough time making accurate forecasts.

One way to invest around this uncertainty is to look for large-cap, blue-chip companies. These companies have strong balance sheets with strong cash flow and pricing power.

Here are three stocks that are not only supported by secular growth trends and capable management but are also projected to outpace the broader index in earnings growth during the second half of 2025.

1. Alphabet: An Undervalued Tech Stock Poised for a Strong Comeback

Alphabet Inc. (NASDAQ: GOOGL) has been one of the worst-performing Magnificent 7 stocks in 2025. The primary concern is how the growth of generative AI will impact the company’s search business.

That question will play out over years. However, in the company’s first-quarter earnings report, revenue was up 12% YOY and earnings per share (EPS) were up 49% YOY. That growth was consistent across each of the company’s Services verticals, including YouTube's growing popularity.

But the real growth story continues to be in Google Cloud, which is increasing its revenue faster, on a percentage basis, than Amazon.com Inc. (NASDAQ: AMZN) and Microsoft Corp. (NASDAQ: MSFT) with their AWS and Azure platforms.

Alphabet also has next-stage growth levers such as autonomous driving (i.e., Waymo), AI chip development, and quantum computing. The company continues to invest in each of these initiatives while increasing its free cash flow and announcing a $70 billion share buyback.

The Alphabet analyst forecasts on MarketBeat give GOOGL stock a consensus price target of $199.95, which is an upside of around 13%. That's slightly below the EPS growth expectations of around 14.8%. The stock becomes even more attractive when you consider it’s trading around 20x forward earnings, which is a discount to itself as well as to many technology stocks.

2. Eli Lilly: GLP-1 Lead Will Keep Expanding Despite Growing Competition

Eli Lilly & Co. (NYSE: LLY) was one of the best-performing stocks in 2024, a year dominated by a narrow group of stocks. The good news for LLY stock investors is that as the breadth of the rally expands to more stocks and sectors, LLY stock looks poised to move even higher.

With its Mounjaro and Zepbound GLP-1drugs, the company has built a formidable lead in the GLP-1 category. Eli Lilly is working on an oral version of this treatment that will meet a key patient need.

Investors should also focus on Lilly’s pipeline, which includes potential treatments for Alzheimer’s disease and cancer. These two sectors will likely show strong growth over the next decade.

Since making an all-time high in August 2024, LLY stock is down nearly 15%. However, it’s up nearly 7% since the company delivered its first-quarter earnings, beating YOY revenue and earnings by 45% and 29% respectively. Analysts are projecting earnings growth of more than 34% in the next year. They also give LLY stock a consensus price target of $1,012. That’s a gain of over 31%.

At over 62x earnings, Lilly stock trades at a premium to the broader market— but it’s actually trading at a discount to its historical average.

3. JPMorgan: A Rock-Solid Choice for Uncertain Investors

To many investors, bank stocks are predictable and boring. However, with a total return of over 256% in the last five years, JPMorgan Chase & Co. (NYSE: JPM) continues to make boring beautiful.

Banks have benefited from higher interest rates, which have allowed them to post significant gains in net interest income. However, some investors are concerned about putting their money in bank stocks, as the Fed will likely begin cutting rates in 2025.

But no matter where interest rates move, the strength of JPMorgan’s balance sheet makes it a winner. If interest rates go lower, JPMorgan will see increased loan growth with less risk of default.

Among these three stocks, JPM stock is expected to deliver the most modest earnings growth at 7.2%, still above the S&P average. That’s not unusual for a bank stock. Investors also need to account for the company’s dividend, which has a yield of 1.92%.

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Amazon's Prime Day Pullback Meets Bullish Golden Cross Signal

Every company has its own set of key performance indicators (KPIs), especially those in the United States' technology sector. However, there is typically one major indicator of future momentum and financial success that can be found within the largest companies in the market, and Amazon.com Inc. (NASDAQ: AMZN) is one of them, with a market capitalization of $2.3 trillion today.

Prime Day is a widely celebrated discount day among Amazon users, as it typically brings about discount windows that significantly boost the platform’s revenue and volume, not to mention brand awareness worldwide. With this in mind, investors can begin to connect the recent results emerging from Prime Day and the underlying price action in Amazon stock, as a deeper story is unfolding there.

On a technical and valuation basis, Amazon is poised to continue pushing for higher prices and offer investors additional upside potential down the line.

However, concerns are brewing as the ongoing tariff negotiations diminish the excitement and certainty that the company will be able to sustain this current momentum, a fear that is becoming more than just a thought with the recent Prime Day reaction.

A Different Prime Day This Time Around

Shares of Amazon were down by roughly 1.3% on one of the most anticipated days of the year, as reports indicate that Prime Day sales were down as much as 14% compared to last year's during the event's early hours.

While plenty of time remains to judge whether orders will come in during the rest of the week, most of the indication for the discount window and its performance is typically driven by the early hours of the launch. This contraction in order volume does not give markets a great deal of confidence that things will turn around.

However, bearish this may seem, it isn’t a huge reason for investors to remain concerned about the future of Amazon stock or the company itself. The comforting factor is that there isn’t necessarily something wrong with Amazon’s platform itself, but rather the prices in the overall industry, which are elevated due to ongoing tariff negotiations.

Because prices are now up for items and their shipping, especially those exposed to tariff rates, Amazon didn’t deliver on the usual discounts that users had come to expect, a reasonable explanation for sales being down 14% over the year. Recognizing that this is an industry-wide rather than a company-specific issue can lay the foundation for a recovery.

In fact, markets must have been aware of this going into Prime Day, as tariffs have been in place for a long time prior to the event, which is why the technical setup in Amazon today becomes much more critical.

Amazon Stock Just Shaped a Golden Cross

In the world of technical analysis, a golden cross event is one of the best indicators to look for in a stock in order to judge its future momentum. This event signifies that a short-term moving average, in this case the 20-day moving average, has crossed above a longer-term moving average, such as the 50-day moving average in this instance.

Whenever this happens, and at an accelerating rate as it is today, the regime overhauling the stock is likely to be bullish for the coming weeks and months. Fundamentally, this momentum indicator suggests whether the market is looking to take the stock higher or lower in the near term.

Considering this, investors can see that pricing in a potentially disappointing Prime Day did not slow down Amazon's stock. Now trading at 91% of its 52-week high, it’s likely that this golden cross will push prices back to previous highs and attempt to surpass them.

Knowing how important momentum is to a stock and that this short-term decline due to Prime Day doesn't indicate any future problems, some on Wall Street decided to take advantage of this gap to be filled higher. Youssef Squali, an analyst from Truist Financial, is one of these optimists as he reiterated a Buy rating on Amazon stock with a $250 per share valuation.

This view would not only mean that Amazon can make a new 52-week high before the year is over, but also that investors are staring down a potential upside run of up to 14% from where the stock trades today. Even the bears understand how significant momentum is and how unlikely it is for Amazon to stop anytime soon.

Over the past quarter, the short interest balance for Amazon stock declined from $18 billion in the first quarter of 2025 to only $13 billion in the current quarter. This is a sign of bearish capitulation even in a world of tariff and price uncertainty, giving bullish investors another pillar of strength to lean on in the coming weeks and months.

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