The stock market showed some signs of fatigue on Thursday, although that didn't stop the S&P 500 (SNPINDEX:^GSPC) from reaching another record high. Strength in the Dow Jones Industrial Average (DJINDICES:^DJI) counterbalanced modest declines in the Nasdaq Composite, with much of the former's gains coming from enthusiasm linked to the authorization of a quick COVID-19 test.

Today's stock market

Index

Percentage Change

Point Change

Dow

0.57%

160

S&P 500

0.17%

6

Nasdaq Composite

(0.34%)

(40)

Data source: Yahoo! Finance.

Electric-vehicle (EV) stocks have gotten a huge amount of attention lately, especially given the ascent of industry giant Tesla (NASDAQ:TSLA). Today, the initial public offering of another EV specialist showed that competition in the arena continues to ramp up. For some, that's a sign of worry. For others, though, it indicates the huge demand that investors have for shares of companies within the industry.

Another Tesla rival in China

U.S. investors have gotten familiar with NIO (NYSE:NIO), a Chinese manufacturer of electric SUVs. Xpeng (NYSE:XPEV) also makes electric vehicles, with the goal of serving a consumer market that's hungry for EVs.

Xpeng shares some common strategies with Tesla. Xpeng's P7 sedan and G3 crossover are both geared toward an audience that likes high-end features, including extended range on a charge and some limited autonomous driving capabilities. The vehicles don't share Tesla CEO Elon Musk's insistence on top performance specifications, but Xpeng makes up for it with plush interior design that caters to luxury car buyers.

Statute on top of the Great Wall of China

Image source: Getty Images.

But Tesla doesn't need to start quaking in its boots just yet. Although Xpeng has production capacity of roughly 250,000 vehicles per year at its two plants in China, it has only delivered just over 20,000 vehicles so far.

Investors can't get enough

Xpeng had good timing with its IPO. The company boosted its offering price by 25% to $15 per share, and it also upped the size of the IPO from 85 million to 100 million shares. That pumped roughly $1.5 billion into Xpeng's coffers, which it says it will use to jump-start production and widen its distribution and service footprint within China.

Once investors who missed out on the IPO got a chance to buy shares on the secondary market, they gave Xpeng stock an extra boost higher. By the end of the day, shares had soared more than 40%, closing above $21.

If anything, though, news of more competition only highlighted the massive head start that Tesla has. The automaker's stock climbed another 4%, hitting another all-time high and bringing its market capitalization to a stunning $417 billion.

EV makers have become a huge trend the auto industry, and investors seem to want all of these companies to succeed. It could take decades for a full transition to electric vehicles, but long-term investors with that kind of time frame are placing their bets on companies like Xpeng, Tesla, and their peers.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.