In a major development, Daimler AG and Chinese joint venture partner, BAIC Motor Corporation, have reached an agreement to jointly invest $735 million for the production of battery electric vehicles in China by 2020. The joint venture also seeks to provide the necessary infrastructure required for the project.

The huge potential in the Chinese market might have prompted the automaker to make such move. In fact, it is expected that by 2025, the Chinese market will have a considerable share in global sales of Mercedes-Benz electric vehicles.

Last month, Daimler and BAIC inked a deal for upgrading the production facilities at BBAC to make New Energy Vehicles. These low-emission New Energy Vehicles include hybrid and pure battery electric cars.

Daimler has underperformed the Zacks categorized Automotive - Foreign industry in the last three months. The company’s share price has decreased 0.4%, while the industry gained 1%.



Currently, Daimler sports a Zacks Rank #1 (Strong Buy).

Other top-ranked stocks in the auto space include Allison Transmission Holdings Inc. (ALSN Quick QuoteALSN - Free Report) , Cummins Inc. (CMI Quick QuoteCMI - Free Report) and Continental AG (CTTAY Quick QuoteCTTAY - Free Report) .

While Allison Transmission Holdings sports a Zacks Rank #1 (Strong Buy), Cummins and Continental AG carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Allison Transmission has an expected long-term growth rate of 11%.

Cummins has an expected growth rate of around 11.7% in the long term.

Continental has an expected long-term growth rate of 7.8%.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

See This Ticker Free >>