The electric car is coming but we’re still in the very early stages. While Tesla is already a $600 billion companies and one of the 10 largest U.S. stocks, only 3% of all passenger vehicles sold in the United States today are even hybrids, let alone fully battery-operated. The real race to capture the other 97% of the market is underway now . . . and there’s no clear winner.

However, Tesla bulls have already come a long way in the last decade and I don’t see them getting enough charge to reach their destination. The stock is simply beyond its functional range. Here’s what I mean. In a good year, 86 million new cars get sold across the planet. That’s the peak rate of replacement as old cars wear out, new capacity is needed and upgrades to new fuel efficiencies happen.

That number is a hard limit. Maybe a great company can convince a few more people to buy a new car every year, but I’m not sure that company is Tesla, which prides itself on durability (fewer replacement cycles) and commands premium pricing (unaffordable to most people on the planet). Tesla cars are built to last and priced accordingly.

That’s not how you grow the market. Apple didn’t become a mobile computing powerhouse trying to sell the most phones. It simply sold premium phones to people who could already afford them. That’s what Tesla does.

But it means that at most Tesla might capture 86 million sales a year in an absolute perfection scenario. Great, right? That’s 10-11 times Toyota’s current reach and so we should expect the stock to be worth 10-11 times Toyota.

At best, in that absolute perfection scenario, relative valuations imply that Tesla is worth $1250 a share. You’ve doubled your money one more time and now have nowhere else to go. Great! At that point, the car market has been conquered. Elon Musk has won. And now his reward is that his stock will be priced like everyone else’s.

But absolute perfection is unlikely and by definition it’s as good as it gets. Say Tesla only becomes the top car maker on the planet in the coming decade. Not the “only” car maker because the rest of the industry is not going to roll over and die . . . but say it hits double Toyota’s current reach in the foreseeable future. Logically, Tesla would be worth double what Toyota is worth today, right?

Problem: that math points to a $500 target on Tesla. Ouch. Meanwhile, if everything goes Elon Musk’s way this year, he can roll out 1 million vehicles. That’s not world domination. That’s barely enough to crack into the ranks of the Top 25 car makers on the planet. If GM rated the same valuation on an existing market share basis, it would be a $1750 stock. I like GM, but not that much. Toyota? $4000 a share. Go the other way and pricing TSLA like a real car stock yields as little as $25-$30 a share.

Meanwhile, Big Auto is happy to sell as many plug-in cars as the global market will buy. Toyota is already here. GM is already here. Nissan is already here. Tesla isn’t even 40% of the electric market and the electric market isn’t even 3% of the overall hybrid/fossil market. As the math changes, so do production lines. Then there’s Apple. The Apple Car could be on the market by 2023. Who wants to get in Cupertino’s right of way?

So the solution for investors is simple: get out of the way. Find the most innovative manufacturers refining the EV proposition to give more than 86 million people a reason to buy cars every year. Look for companies expanding the global market. That means going to China, where even a “mass market” Model 3 Tesla costs triple the average household pay and as a result charging stations are relatively scarce.

Think about those charging stations in particular. Even in the United States, the Tesla Supercharger network just can’t compete with nearly 170,000 old-fashioned filling stations when you need to travel long distances across remote country.

A 16-gallon tank can take a gas car about 650 miles down the highway. Most Teslas on the road today can range at best half that distance before the driver needs to locate a Supercharger and take a 15-minute break to buy back another 200 miles. And if you can’t get to a charging spot in time, your expensive car turns into an expensive brick.

Go Global For Real Results

The global transportation network will remain a hybrid gas/battery environment for years to come. And that’s especially true in China, where it can be hard enough to find a gas station when you need it, let alone a battery recharge on the go.

That’s why I believe range is the real GameChanger when it comes to expanding EV adoption worldwide. If you give China more miles per charge, the world will line up.

And that’s why I’m interested in Li Auto Inc. (NASDAQ:LI) as a long-term player. You can think of it as a less utopian version of Tesla. Instead of starting with upscale high-performance sedans, Li built a family SUV that sells at roughly the same price point: fewer frills, a whole lot more seats. And instead of asking people to commit to a road charging network that doesn’t exist, Li made sure that its cars can burn gas in a pinch.

These are hybrids with the ability to go from filling station to filling station and even recharge the battery while the combustion engine is engaged. In theory, they never need to find a charging spot, and in practice they comfortably range a little less than 500 miles before exhausting all forms of fuel.

This is the real future of battery-driven transportation. China is a big country. A 500-mile day is good. Ultimately, I want to see Li offer long-haul systems that will take you 2,500 miles on a single charge . . . with or without gas in emergencies. Tesla is not leading the way here. Elon Musk’s commitment to the battery-or-bust propulsion system guarantees that he’s giving Li the first move in the biggest car market on the planet.

In the meantime, Li is ramping up production fast from a very low base. The company delivered 33,500 SUVs in roughly its first year of manufacturing, which is about what Tesla was able to do back in 2015. Tesla was a $50 stock in those days. You can do the math on what this means for Li shareholders if history even comes close to repeating itself.

And the ramp accelerates fast from here. This year, Li aims to make 100,000 cars without straining existing capacity, bringing it to where Tesla was throughout 2016 and 2017. Next year, production can double again, in which case the company will effectively gain another lap on its biggest rival. That’s what we want to see here. As long as growth is visible, investors with a global focus can justify the kind of elevated valuations Tesla enjoys now.

Li can triple its revenue this year and double it again in 2022. At best, I’m looking for Tesla to raise the top line 50% this year and another 30% after that. When valuations are equal, I’ll go for the higher growth rate every time.

And valuations aren’t equal. Li is available for 8.5X current revenue. To get a share of Tesla, you need to pay 12.8X revenue. Maybe Elon Musk’s aura is worth a premium, but if you made me buy one EV manufacturer, I’d go with the numbers.

Better Mileage From The Peripheral EV Stocks

But nobody’s making me buy either one right now. While I like Tesla a lot at the right price and find Li extremely interesting in the long term, the work we do in GameChangers is all about finding the right entry point.

We want stocks with near-term potential left to capture when we buy in. Stocks that have already given investors a great experience rarely make the list . . . unless you have a time machine, the past is dead. We’re all about the future. And of course, we don’t want to let our speculative impulses get too far out of hand dreaming about that bullish future.

Our stocks tend to come with strong current cash flow and stronger prospects. They already have viable commercial franchises and significant share of established markets. Right now, that’s why I prefer Fisker Inc. (NYSE:FSR) to any of the big EV manufacturers.

FSR is still a small company with great things ahead of it. But it has designer cachet, assembly contracts in place and a 10,000-car waiting list. Those people are so hungry to own a Fisker sedan that they’ve paid a nonrefundable deposit to secure their place in line as the first production models roll out this summer. That’s $400 million in revenue essentially guaranteed.

And once those cars are on the road, the fun really starts. A $400 million sales base makes FSR broadly comparable to Tesla circa 2014. At the right price, you don’t have to conquer the world. All you need to do is convince a conventional car company like GM to buy you out. That’s the opportunity here.

Maybe you love Elon Musk but can’t stomach his stock at this price. That’s when you start searching the Tesla supply chain for a company that benefits from his success . . . but the shares haven’t yet received the same level of spotlight.

Tesla is a hard supply chain to crack. The batteries are proprietary and lithium is a commodity. But take a look at Modine Manufacturing Co. (NYSE:MOD), which is widely believed to make the refrigeration systems that keep all that lithium from exploding when it gets hot.

Start there. While MOD has already quadrupled over the past 12 months, there’s plenty of room for the rally to continue down here below $20. After all, all EV need temperature control. Whether Tesla, Li, Fisker or any other manufacturer takes over the road, component makers like this one prosper either way.

And EV means a lot more than cars. Electrameccanica Vehicles Corp. (NASDAQ:SOLO) is thinking about ways to combine “EV” power systems with recreational “RV” designs. We’re talking about next-generation motorcycles here: small, short-range, fast when they need to be and easy to park.

SOLO has deep pockets thanks to foreign backing. The vehicles are nimble enough to weave through traffic in rush hour, charge during the working day and then take commuters back to the suburbs in time to recuperate for tomorrow.

And you know how popular small-format vehicles are for people in Asia’s crowded cities. They’re based more on the bicycle than the stagecoach. This one retails for $18,500. The stock looks eager for a fresh run beyond $10.

What about lithium? People always ask. Sociedad Quimica y Minera de Chile (NYSE:SQM) is my favorite. It’s done well for us. It will continue to thrive as the world buys the lithium SQM digs in Chile’s vast salt flat and exports to anyone desperate for battery capacity.

Elon Musk is cagey about his lithium supplies. Everyone else is still racing to make sure they can source enough “energy metal” for the future. We want to make sure we’re ahead of that demand curve, which is why I keep SQM on my screen.

And if you want to stay ahead of that curve, this report is only a taste. Subscribers to my FREE weekly market letter get access to my current thoughts on innovation, investing and technology.