The disruption caused by electric vehicles (EV) in the auto industry is only comparable to the disruption caused by Henry Ford in the early 20^th century when he started mass-producing automobiles.

EVs are causing great changes in the auto industry. This rush was championed by Tesla Inc.  However, there are many competitors in the manufactures of EVs today. Though the EV market seems overpopulated, there is massive room for growth as the world strives to reach zero emissions. Here are two EV stocks that I’m watching.

Nikola Corporation: a future electric vehicle giant?

Nikola Corporation (NASDAQ:NKLA) was founded in 2014 and is headquartered in Phoenix, Arizona. The company engages in the provision of zero-emissions transportation and infrastructure solutions.

Nikola has two business unit: the truck business and the energy unit. The first develops and commercializes battery electric vehicles (BEV) and hydrogen fuel cell electric vehicles (FCEV). The energy business unit develops and constructs a network of hydrogen fuel stations to meet hydrogen demand for its hydrogen-powered electric vehicle customers. The EV stock’s management team believes its network of hydrogen fueling stations gives it a competitive advantage. And combining this infrastructure with its diverse product portfolio, I have to agree with them.

As the world shifts towards zero emissions, I believe the demand for EVs will continue to increase. Nikola seems to have positioned itself to be one of the go-to companies for Battery-EV trucks and Fuel Cell EV vehicles. Interestingly, it beat market expectations in its last three quarterly earnings reports. That, in my view, is a sign of good things to come. However, past performance does not correctly predict future performance.

Nikola’s major competitors include Tesla, Daimler, BYD, Volvo, Hyliion, Hyundai, Xos Trucks, Peterbilt and Toyota. These competitors can affect the performance of Nikola, where they deliver better products or services.

Xpeng Inc: a leader in China

Xpeng Inc. (NYSE:XPEV) is one of China’s leading smart EV companies. The firm designs, develop, manufactures and markets smart Electric vehicles. Its EVs have seamless integration with advanced internet, AI and autonomous driving technologies. Xpeng was listed in the US market via its $1.5 billion IPO on 27^th August 2020. And revenues as of 31^st March 2021 was $450.4 million – up by 616.12% on a year-on-year basis.

In its 2021 first-quarter report, it delivered 13,340 units, an increase of 487.4% from 2,271 units in the same period a year before. A gross margin of 11.2% was reported compared to a negative 4.8% reported for the same period last year.

The company has entered into a cooperation agreement with the city of Wuhan to build the Xpeng Motors Wuhan Smart EV Manufacturing Base. This will translate to more vehicle production in the long run, and that’s more profit for shareholders. It has projected to deliver 15,500 to 16,000 vehicles and $532 Million to $548 Million in revenue for the second quarter of 2021.

Like every business, Nikola and Xpeng have fierce competition to face off – including each other. The constant battle for electric vehicle market dominance could lead to supply restrictions as well as poor internal investment decisions in the pursuit of growth. After all, not all growth creates value. But despite these risks, I believe the EV market is large enough to have multiple winners. And out of all the companies I’ve looked at so far, these two look like they could be the best opportunity for my portfolio.