Electric vehicles (EVs) continue to be a hot topic for investors, but there are more players than ever to be aware of. As the industry expands, new niches are forming, and two are particularly attractive for investors looking for growth and potentially high profits. 

While they aren't moneymaking machines yet, Rivian Automotive (RIVN 1.85%) and Proterra (PTRA) are cheap for their own reasons. 

The EV upstart

Rivian delivered only 7,363 vehicles in the third quarter of 2022, but it's ramping up production quickly. The company recently confirmed plans to deliver 25,000 vehicles this year and is building a factory in Georgia with capacity for 400,000 vehicles on top of the current 150,000-unit capacity in Normal, Illinois.

What makes Rivian intriguing is that it's building a business model that should be highly profitable. Trucks and SUVs typically have higher margins than cars, Rivian is building a delivery and service fleet without third-party dealers, and it hasn't had to do any advertising. These points are copying Tesla's business model in a lot of ways.

Production might not be what you would hope for a public company, but Rivian has the capital to build out over 500,000 units with its current balance sheet. It has over $15 billion of cash as of the end of the third quarter and no debt. 

Rivian's market cap of $30 billion isn't small, but given the potential upside for a new electric truck and SUV manufacturer, this is a company potentially worth a position in now. 

Don't sleep on industrial EVs

Proterra is another EV company with big ambitions, and in this case, it's going after industrial vehicles. It started with electric buses, but now it's supplying drivetrains for trucks, construction equipment, port equipment, and more. The company expects half of new transit buses to be electric by 2025, and electric school buses to be 30% of the market by then.

The potential is certainly big, but Proterra is still early in its development. You can see below the company generated just $264 million in revenue over the past year and lost $101 million over that time. 

PTRA Market Cap Chart

PTRA market cap. Data by YCharts.

This isn't a cash flow business yet, but it's growing into a potentially massive market. Management expects revenue to grow 24% to 34% this year to $300 million to $325 million as the move to supply battery systems takes hold. In the first quarter of 2020, Proterra delivered four battery systems, and that jumped to 328 last quarter. 

As more partners begin to buy Proterra products, the company should gain efficiencies from scale and further development. Given the company's $1.3 billion market cap, there's a solid risk/reward profile for Proterra. 

EVs are just getting started

The common theme here is that Rivian and Proterra are building vehicles for extremely large markets that they could dominate in time. They're both losing money and are early in their development, but given the upside, they're too cheap to pass up.