Electric car stocks dominate the broader stock market because electric car sales are growing rapidly. Electric car owners, stricter emissions standards, government subsidies, the development of charging stations, the most efficient battery technology and tax incentives to phase out fossil fuels will accelerate the development of more viable transportation.
Analysts initially challenged Tesla and its purchase of electric cars, but the company has astronomically increased both car sales and its stock price. New market entrant Livian has shown similar growth from the start, and Ark Invest expects the number of electric vehicles to reach 3.7 million by 2024, as battery power becomes cheaper and more efficient and electric vehicles become more affordable. They state that the biggest cost element of an electric car is its battery, so cost reductions are necessary to achieve price parity with natural gas vehicles.
The Biden government in the U.S. also explicitly states a goal to build 550,000 electric vehicles in the next 10 years, making a purely electric federal fleet.In November 2021, the Infrastructure Act was passed, providing significant tax incentives for buyers of electric vehicles in the U.S.
Electric vehicle ETFs make it easier for investors to try to analyze and pick winners from a large number of electric vehicles. Some are small, newly established companies. Others are large automakers that want to electrify their products. ETFs on electric vehicles provide a wide margin of victory for rising stars like Tesla and the technology used in these vehicles. Take a look at the best electric car ETFs below.
Below are five of the best ETFs for electric cars to enter the market. Most of them represent automated vehicles (cars).
Like Driv, IDRV Holdings provides global access to car and electric vehicle manufacturers, driving technology companies, electric vehicle battery manufacturers and electric vehicle batteries.
Hail is a broad future transportation ETF from SPDR, providing access to autonomous and connected vehicles, unmanned vehicles and unmanned commercial and political vehicles, unmanned technology and advanced vehicle tracking and optimization systems.
The mutual fund uses a comparable accounting method and has one of the lowest stocks in the sector at 0.45%. Unlike previous mutual funds, Grad's 60 assets are heavily concentrated in the U.S. (about 82%).
KARS provides access to electric vehicles, autonomous driving, general mobility, lithium and/or copper production, batteries, hydrogen cells or electric infrastructure. This focus is similar to Global X's Driv, but KARS is much more involved with electric vehicles and has a lower AV weight.
KraneShares is well versed in Chinese stocks, as evidenced by the fact that 20% of KARS assets are owned by Chinese companies; KARS owns 60 stocks, has an AUM of about $180 million and an expense ratio of 0.70%; KARS has real EV producers KARS is probably the most targeted EV fund on this list in terms of real EV producers.
Interestingly, LIT has been around since 2010 and is the most popular fund on this list with nearly $3 billion in assets. It is also the most expensive, with a commission of 0.75%.
LIT mostly owns shares in small foreign companies you've probably never heard of, but the fund is 20% open in the U.S., and Tesla is one of its top 10 assets. Panasonic, LG and Samsung are also in the top 10. In fact, these four companies make up more than a quarter of LIT's assets by weight.
Because LIT plays a role in the lithium industry, its performance does not correlate well with that of the EV-focused ETFs mentioned above.
Where to buy these EV ETFs
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