After little research, I was able to make it work. Basically first issue comes when you use directive inside ng-repeat (also directive).
In this case directive's scope must be set for example like: scope: {car: '=highlight'}
. This can desribe what happens. I would rather use <ul highlight="cars"></ul>
along with directive's template like '<ul><li ng-repeat="car in cars"></li></ul>'
. So ng-repeat would be inside directive.
When you get through, another issue comes in form of syncing two directives (different scopes). You need DOM ready to select element from another directive. I saved your compliled element to car object - it can be count as workaround that make it easier.
Forked plunker here