While media sweetheart Tesla Motors, (NASDAQ:TSLA) keeps shareholders on their toes, another EV company, Kandi Technologies Group, Inc (NASDAQ:KNDI), is quietly making waves in the Chinese market.

Got a sweet spot for EVs?
Since its inception, Tesla has been working on revolutionizing the EV market. Making cars that put the small and slow EV stereotype to rest, Tesla has allocated a great number of resources to develop cars devoted to enhancing the driver experience. The Palo Alto company has focused on implementing the most advanced technology it can into its fleet, while ensuring every aspect of the Tesla experience screams luxury. Tesla's aim has been to dominate the ultra-high-end EV market, and it's been working, as the company's return on assets has been on a steady incline in recent months.

TSLA Return on Assets (TTM) Chart

TSLA Return on Assets (TTM) data by YCharts

Kandi has taken the opposite approach. The Chinese company has historically focused on recreational vehicles, such as ATVs and go-carts, but has recently begun to allocate resources to developing EVs for the more budget-conscious consumer. When compared to the Model S and X, Kandi's fleet looks like child's play.

Kandi's EV Fleet. Source: Kandi's website

So cute you could eat it up
Kandi is tiny, especially compared to Tesla (check out the market capitalization of both below), but its growth potential is huge. While Tesla is working from the luxury segment down, Kandi is taking the opposite approach, as it's focusing on developing a fleet of low-speed two-seater EVs for the low-end market.

TSLA Market Cap Chart

TSLA Market Cap data by YCharts

Kandi is working from the bottom up in China, specifically. Back in 2010, the company began to expand its EV effort by forging the Alliance for Chinese Electric Vehicle Development and Commercialization. That alliance saw Kandi working with major Chinese energy, IT, and battery companies in order to expand the company's EV effort. More recently, the ATV maker entered into a partnership with Geely Automotive, China's largest passenger vehicle manufacturer, in order to supply EVs for the city of Hangzhou's pilot EV-leasing program.

A spoonful of sugar helps the emissions go down
Its no secret that China is facing an uphill battle in trying to meet the transportation needs of its growing population, while attempting to mitigate its growing air quality and public health concerns. In order to limit emissions, the Chinese government has restricted car ownership opportunities by implementing a license plate lottery for both conventional  and electric vehicles.

A factory in China. Source: Wikipedia, used under creative commons

Even facing the ever-present deplorable air quality, Chinese consumers have little faith in EVs, opting to bid on conventional fossil-fuel vehicles instead of trying their chances at getting a car with zero emissions. For each available conventional car permit, there were 90 bids from potential owners while, of the 1,666 new energy plates offered, only 1,428 folks put in bids.

Kandi is hoping to increase consumer faith in EVs, meet growing vehicle demand, and circumvent the ownership lottery by expanding its car-share program beyond Hangzhou.

Sugar rush
Kandi is the first company in China to propose and successfully implement a car-share program. The company notes that this program meets the needs of the Chinese driver while alleviating the concerns surrounding EV ownership, specifically, charging accessibility.

Kandi's car-share vending machine in Hangzhou. Source: Kandi's website

By strategically placing its car-share vehicle charging and vending machine structures in areas of highly concentrated commuter traffic, like airports, train stations, hotels, business centers, and certain residential areas, Kandi alleviates range anxiety while increasing driver accessibility.

Kandi's car-share program leverages the growing demand for vehicles, the success of public transportation, and the ease of taxi service, all the while decreasing emissions and increasing consumer EV confidence.

Finding that sweet spot
Looking to expand its car-share initiative to cities like Bejing, Chengdu, and Nantong City and agreeing to deliver 3,000-5,000 of its EVs for Shanghai's new program puts Kandi in a tasty position. The potential for this company's growth is huge, especially considering that it has no real car-share competition, and it has the opportunity to ride the Tesla media wave as a smaller, cheaper, EV alternative.

Potential investors interested in the EV market should consider looking at Kandi as a sweet alternative to Tesla and its hefty price tag.

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.