Everyone wants to find the next Tesla (NASDAQ: TSLA) for 2021. Not surprising, since its shares are up 663% in 2020 alone. While it's the first mover, and biggest horse, in the electric-vehicle (EV) race, many other EV stocks have surged in the latter half of 2020.

Going public through special purpose acquisition companies (SPACs) has been all the rage for many in this sector, and investors have been piling in. Some companies are still pure speculation without any sales, and some have more promise. Here's a look at some EV stocks and how they might do in 2021 and beyond.

Image source: Getty Images.

Players in the EV game

Tesla isn't the only company quickly growing sales of its electric cars. It built a plant in Shanghai because China is the largest automotive market in the world, and EVs are growing quickly there. NIO (NYSE: NIO) recently reported that it is accelerating production expansion, and its November sales doubled compared to 2019. And competitor XPeng (NYSE: XPEV) reported its November sales soared 266% over the year-ago period. These sales are off a low base, but the stocks have been jumping nonetheless.

Valuations of these Chinese EVs have grown even richer than Tesla, as measured by price-to-sales ratios.

TSLA PS Ratio data by YCharts.

A high price-to-sales ratio isn't even as surprising as seeing companies with high valuations that don't yet have any product sales to measure. And there are plenty of those, too. Aspiring electric-truck makers Nikola, Hyliion Holdings, and Lordstown Motors aren't even making product at this point, yet have market capitalizations in the billions.

Other roads to electrification

Beyond the electric car and truck makers, there are others trying to fill niches as the sector grows. Operators of EV charging networks are gaining attention with investors. Blink Charging, ChargePoint, and EVBox are all growing. The latter two are merging with SPACs Switchback Energy Acquisition and TPG Pace Beneficial Finance, respectively, to be traded publicly.

An Arrival bus, scheduled to begin production in the fourth quarter of 2021. Image source: Arrival.

Workhorse Group is focusing on last-mile-delivery trucks, and U.K.-based Arrival (which is being brought public through CIIG Merger) is also going to make delivery vans as well as municipal buses. There are others looking to popularize special-purpose urban-use and recreational EVs. Another, XL Fleet (NYSE: XL), focuses on turning commercial and municipal internal combustion engine vehicles into plug-in hybrid drive systems. XL Fleet also plans to expand to fully electric systems and charging through its new XL Grid segment.

How it will shake out

The potential market in the EV sector is enormous. There will be niches and ancillary businesses that will be successful along with vehicle makers. Investors in 2020 got excited by Tesla's stock run and piled into other names without thought of valuation.

Tesla should substantially grow its production above this year's approximately 500,000 vehicles. Even so, being valued at over $600 billion is hard to justify. It at least does have more potential than just vehicles, including battery technology and solar generation and storage. But NIO, which has a $75 billion market cap and under 37,000 vehicles delivered in 2020 through November, would seem to have an extremely long road to grow into that market value. Workhorse Group has an absurd price-to-sales ratio of over 2,300, with plans to grow production to just 1,800 vehicles in 2021.

So will EV stocks crash in 2021? Some most certainly will. Even those who want to speculate on a sector with huge potential need to look more into what the potential markets are for each company and which stands out in the crowd. Arrival, for example, is taking a new manufacturing approach using cheaper, more flexible microfactories for its vans and buses. This decentralized production method differentiates it from competitors.

Researching deeper into more than just what the companies make is how investors can hope to reap the potential outsize gains that will come from some in this sector.

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Howard Smith owns shares of Nikola, XL Fleet, and Switchback Energy Acquisition. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.