The health of the stock market has shocked millions of Americans, especially those who've felt the economic brunt of the COVID-19 pandemic personally. Yet the ability of the market to keep climbing showed no signs of letting up on Monday morning. Investors continued to gravitate to the stocks that have been strongest during the first half of 2020, lifting overall markets significantly. Just after 11 a.m. EDT, the Dow Jones Industrial Average (DJINDICES:^DJI) was up 406 points to 26,481. The S&P 500 (SNPINDEX:^SPX) gained 42 points to 3,227, and the Nasdaq Composite (NASDAQINDEX:^COMP) picked up 190 points to 10,808.

The mood among investors has been unrelentingly positive, and today's news of continued progress from the pharmaceutical sector in searching for a potential treatment for COVID-19 did its share to contribute to improved sentiment. Yet it was the electric vehicle market that once again drew a lot of attention from the overall market. Tesla (NASDAQ:TSLA) soared to new record heights yet again, while shares of special purpose acquisition company Spartan Energy Acquisition (NYSE:SPAQ) climbed on news that it has found a merger candidate in the EV industry.

Red Tesla Model Y on a road, with a city skyline in the distant background.

Tesla Model Y. Image source: Tesla.

Tesla's latest moves

Shares of Tesla soared another 14% on Monday morning. That took its share price above $1,750, working out to a market capitalization of over $325 billion.

From a fundamental perspective, investors seemed pleased that the automaker is taking steps to maximize the potential for its newer vehicles. Tesla cut the starting price for its new Model Y electric SUV by $3,000, sending the total sticker price below the $50,000 mark. The move also came as Tesla apparently chose to discontinue its standard-range version of the Model Y, with CEO Elon Musk saying that the range on the vehicle would be "unacceptably low" at less than 250 miles.

Tesla investors also have high hopes for the company entering new markets. India represents the latest in aspirational targets for the EV maker, with well over 1 billion people and a consumer-friendly environment.

Yet much of the hype still surrounds the likely addition of Tesla stock to the S&P 500 index, which could happen as early as next month. Tesla announces earnings in a couple weeks, and if the news is good, it would represent the last hurdle before trillions of dollars in index funds might have to purchase Tesla stock -- no matter what the price.

Fisker goes with Spartan Energy

Spartan Energy Acquisition enjoyed an even bigger jump in its share price, rising 16%. The SPAC will do a reverse merger with privately held electric vehicle upstart Fisker, and with all the attention that the EV industry is getting, now was the perfect time to move forward.

Unlike some of its smaller rivals, Los Angeles-based Fisker already has a vehicle designed. The Fisker Ocean is a fully electric SUV, and industry followers have received the Ocean favorably, with several awards at trade shows earlier this year. With the funding from the reverse merger, Fisker hopes to start producing the Ocean by late 2022.

Investors should understand that certain institutional investors will provide an additional $500 million in funding for the venture. Unlike those buying shares of Spartan Energy today, those institutions will be able to get in at just $10 per share. Such dilution is typical with SPACs, however, and it doesn't seem to be hurting Spartan's share price.

SPACs have been red-hot lately, and the EV industry in particular has drawn interest from privately held companies looking to go public using reverse mergers. As long as Tesla keeps leading the way, there'll be investors who want to bet against the Musk-led giant in favor of small upstarts with lottery-ticket potential.