The stock market got off to a strong start on Monday, as market participants shrugged off concerns about rising case numbers in the COVID-19 pandemic. Instead, the focus seemed to be on the prospects for an eventual return to more normal business and economic conditions. The Nasdaq Composite (NASDAQINDEX:^COMP) and the Nasdaq 100 both rose more than 1% Monday.
But those gains paled in comparison to what's been happening in the electric-vehicle niche. Among Nasdaq 100 stocks, Tesla (NASDAQ:TSLA) took advantage of the interest by posting a 5% gain and seeing its stock climb back above the $1,000 per share level. But a number of companies trying to position themselves to become serious competitors to Tesla have come into the spotlight in recent weeks, and investors are sending shares of those much smaller stocks up even more sharply.
It's been a long road for Tesla
Tesla celebrated its 10th anniversary as a publicly traded stock, and it's been nearly a 60-bagger for early investors who were fortunate enough to be able to participate in the IPO and pick up stock at $17 per share. Along the way, the company has proven that it can take what originally was a concept car with limited manufacturing capacity and turn it into a mass-production vehicle that combines function and style. Thousands of loyal customers and millions of fans have helped turn Tesla into what it is today.
Tesla's still working hard to grow as fast as it can. The automaker hopes to expand a key facility for doing battery research in the Bay Area city of Fremont. Despite CEO Elon Musk's irritation with local health officials about how they've handled the COVID-19 pandemic, Tesla apparently believes that it's more important to move forward quickly than to prove a point to California's government.
Competitors are starting to plug in
Yet Tesla's success has brought plenty of visionaries trying to duplicate what it's done. You can see the excitement about electric vehicles in the way that several stocks performed Monday:
- Nikola (NASDAQ:NKLA), which began accepting pre-orders for its Badger electric pickup truck today, rose 6%. The company also expects to launch a commercial truck line that would compete against Tesla's planned Semi.
- Workhorse Group (NASDAQ:WKHS) saw its stock jump 47% Monday. Investor excitement has risen since the company got approval in meeting federal motor vehicle safety standards for its all-electric delivery vans, and the company just joined the Russell 3000 Index, with the expectation of also joining the more popular Russell 2000 small-cap index.
- Tortoise Acquisition (NYSE:SHLL) hasn't even closed on its planned merger with electric commercial truck powertrain upstart Hyliion, but investors haven't been shy about jumping the gun. Shares of the special purpose acquisition company are up 30% today, adding to massive gains in recent sessions.
Even with investors speculating about the huge potential these companies have, you wouldn't think they have any chance of success if you listened to Musk. The Tesla CEO hasn't hesitated to criticize Nikola since it came into the spotlight, with clear opinions about Nikola's hydrogen fuel cell technology.
For a decade, Tesla has had essentially free rein over the electric-vehicle market. That might be changing, but at least for now, Tesla is still the undisputed leader, and it's got a huge head start that upstarts like Hyliion, Workhorse, and Nikola will have to work hard to overcome.