Image source: Kandi Technologies.

Kandi Technologies Group (NASDAQ:KNDI) isn't the company driving the conversation when people start talking about electric vehicles, or EVs -- it's usually that Elon Musk endeavor that's the focus of attention. Don't be fooled, though. This Chinese manufacturer of electric cars and recreational vehicles has established a significant presence in China, suggesting that it has the potential to park profits in investors' portfolios.

Green light No. 1
If you remember the Beijing Olympics, you probably remember the controversy regarding the city's air pollution. Well, things haven't improved all that much. The Chinese government recognizes this and is looking to remedy it by reducing its reliance on coal and focusing more on renewable energy sources. So even though China represented 98% of Kandi's revenue for the first quarter of 2015, there's still plenty of opportunity left in the country. The government has set a goal of 5 million EVs on its streets by 2020. Adoption of EVs has been slow because of the lack of charging stations, but the government is intent on eliminating this as a hindrance to meeting its target. According to Bloomberg, the Chinese government "will give city governments incentives to speed up construction of vehicle-charging facilities. It also plans to encourage private investment in building charging stations." The government is considering as much as 100 billion yuan, or about $16 billion, in investments.

Additionally, Kandi is quick to note that all of its models are eligible for a three-year, 10% sales tax break, and in Shanghai, consumers can receive free license plates for two of the company's models. According to Kandi, license plates are usually auctioned to the public and average between $11,410 and $13,040 apiece.

Green light No. 2
Having driven over some speed bumps in 2013, Kandi performed well in 2014 and proceeded to do so again in the first quarter of 2015. Revenue grew to $170.23 million in 2014 -- an 80% improvement over the $94.54 million it earned in 2013. The improvement extended into the first quarter of this year. Revenue jumped to $43.8 million, which is a 9% improvement over the $40.2 million it earned in the first quarter of 2014. Translating to the bottom line, improvements were also seen in adjusted net income, which rose a walloping 175% from $5.16 million in 2013 to $14.20 million in 2014. Again, this extended into the first quarter of 2015. Non-GAAP net income totaled $3.4 million -- up 108% from $1.6 million for the same quarter last year. All of this resulted in diluted EPS of $0.13 for Q1 2015, which is a drastic improvement over the diluted EPS of negative $0.36 for Q1 2014.

Green light No. 3
One of the more encouraging signs for Kandi is its interest in diversifying its offerings to consumers. For example, in January the company expanded its Micro Public EV Sharing Program to nine cities. Attempting to "promote and popularize" the use of EVs in China, Kandi offers urban residents a "shared pure EV transportation platform." The company advertises it as less expensive than standard taxis and very convenient in terms of charging and parking. As of the end of 2014, Kandi has delivered 14,398 EVs throughout the country in developing this program.

Kandi's Luxury K30 Image source: Kandi.

The company has been manufacturing EVs in China since 2008, but for a long time it had no luxury model offerings. That changed in November, when the Chinese government approved Kandi's first mid-tier luxury electric vehicle, opening the mid- and high-end markets to the company.

It will be interesting to see how receptive customers are to this offering and how it affects the success of Tesla Motors in China. Even though Tesla has encountered more challenges in the Chinese market than it had first anticipated, it is still optimistic. In the company's 10-Q for the first quarter of 2015, management noted that it plans "to continue to invest in our infrastructure in China, as we believe that the country could be one of our largest markets within a few years."

Foolish final words
There are some compelling reasons to consider Kandi for investment, and with shares trading near 52-week lows, now may be as good a time as any to pick up shares. But before you do, be sure to pump those brakes and give the company deeper consideration.