Electric vehicles were once considered niche products for the ecologically conscious consumer, but have certainly moved into the mainstream in the past few years. In a recent Pew Research Center survey, 7% of U.S. adults said they have plug-in electric or hybrid vehicles, with nearly 4 in 10 saying they were very likely or somewhat likely to seriously consider an EV as their next vehicle. This electric vehicle revolution is being spearheaded by Elon Musk and his renowned company Tesla Inc. (TSLA). But there are many other ways to take advantage of this transportation megatrend. The following are seven exchange-traded products to play the electric vehicle market via ETFs.
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Global X Lithium & Battery Tech ETF (LIT)
At $4.5 billion in assets, LIT is the largest electric vehicle ETF on this list. However, it’s worth noting that its top holdings are in lithium and battery stocks rather than vehicle manufacturers. Specifically, its portfolio holds about 40 companies, with roughly 25% of assets in the top three companies alone: Charlotte-based Albemarle Corp. (ALB) and top China firms Ganfeng Lithium Co. Ltd. (GNENF) and Yunnan Energy. This focus may be disappointing to Tesla bulls, however, it’s important to note that the OTC-traded Ganfeng is very difficult to buy into directly, and Shenzhen-listed Yunnan is practically impossible to access.
There is an undeniable risk when you’re going in on commodity-based stocks like this, particularly when they are overseas producers of lithium. But if you truly believe in the EV revolution, this Global X fund gets you in on the ground floor regardless of which nameplate is on the most popular plug-in car of the moment.
Global X Autonomous & Electric Vehicles ETF (DRIV)
Global X also offers this DRIV fund with $1.1 billion in assets under management and direct exposure to the largest electric vehicle and autonomous driving technology companies.
However, it’s worth noting that among its 80 or so holdings, the “autonomous” players outweigh the core EV companies via names like Google parent Alphabet Inc. (GOOG, GOOGL) and big tech giant Microsoft Corp. (MSFT). Those are hardly what you would call pure plays on electric vehicles, but familiar EV names like Tesla are indeed on the list, just further down. In other words, if you want to play the breadth of emerging vehicle technologies then DRIV could be a good bet – just be aware it’s not directly tied to prominent automakers.
KraneShares Electric Vehicles & Future Mobility ETF (KARS)
KraneShares offers a fund that is similar in name to the prior Global X fund – but this time, the EVs take top billing.
Leading the list right now is China’s Contemporary Amperex Technology Co., a little-known EV battery supplier that has soared 150% in the last 12 months. And after that, you get Tesla, Irish auto parts giant Aptiv PLC (APTV), and China upstart Nio Inc. (NIO) to round out a who’s who of the electric vehicle space right now. There are some other tech stocks on the list, but KARS is much more heavily weighted towards actual EV plays than other funds on this list and commands a decent $300 million in total assets to offer a reasonably established option for investors to rely on.
iShares Self-Driving EV and Tech ETF (IDRV)
Another relatively established fund, boasting about $400 million in assets, is this iShares fund that has the longest list of components with about 100 holdings at present.
Unfortunately, that big list of total stocks is dominated by conventional Silicon Valley names with chipmakers Advanced Micro Devices Inc. (AMD) and Nvidia Corp. (NVDA) in the top two spots to represent about 10% of the portfolio, with other Big Tech names scattered throughout. You will find a few pure-play EV stocks on the list, but this is largely a tech fund with a faint focus on plug-in cars – which in all honestly could be the best option for casual investors looking to bias only slightly toward this transportation trend without going “all in.”
SPDR S&P Kensho Smart Mobility ETF (HAIL)
A smaller fund at roughly $200 million in assets, this “smart mobility” ETF focuses on electric vehicle stocks as well as other emerging transportation technologies.
This makes for a strange mix of components, with Swedish autonomous driving sensor provider Veoneer Inc. (VNE) and energy infrastructure play Aspen Aerogels Inc. (ASPN) at the top of the list right now. Other more intuitive electric car plays, such as charging network operator Blink Charging Co. (BLNK) or EV mainstay Tesla, do make the list further down. But, it’s important to note that many of the positions are tangential plays on electric vehicles as they play broader transportation trends. The good news for those after diversification, however, is that this SPDR electric vehicle ETF not only has a broad portfolio but also rebalances regularly with an aim of being “equal weight” in all stocks, with a target of about 2% in each of the roughly 50 components to prevent reliance on any single firm.
Amplify Lithium & Battery Tech ETF (BATT)
Harkening back to the first pick, the dominant $4.5 billion LIT fund from Global X, this Amplify offering has a similar bent with a focus on the lithium that packs the power in EV battery technology.
Tesla tops the list, accounting for about 7% of the total portfolio right now, but other components are similar – even if the order is different with lithium miner BHP Group Ltd. (BHP) ahead of other holdings like Yunnan, Ganfeng, and Albemarle. The placement of Tesla higher in the makeup may not be enough to win over investors, however, as BATT is the smallest fund on the list with barely $200 million in assets and an admittedly smaller ETF shop as its sponsor.
ARK Innovation ETF (ARKK)
The last ETF on this list isn’t strictly an EV play, focused instead on the companies engaged in dynamic innovation – of which electric vehicle technology is surely a focus.
Adding to the intrigue is that ARKK is an actively managed ETF, chasing ‘‘disruptive innovation’’ that it defines as “the introduction of a technologically enabled new product or service that potentially changes the way the world works.” Tesla is clearly in that camp, currently making up about 11% of the portfolio. But you’ll also see exposure to remote healthcare player Teladoc Health Inc. (TDOC) and streaming video play Roku Inc. (ROKU) too. If you want to dabble in EVs as part of a broader play on innovation, then this massive $25 billion ETF could be up your alley. Just remember that this wide net means you’ll get exposure to other potential risks and rewards not strictly connected to electric vehicles.
- Global X Lithium & Battery Tech ETF (LIT)
- Global X Autonomous & Electric Vehicles ETF (DRIV)
- KraneShares Electric Vehicles & Future Mobility ETF (KARS)
- iShares Self-Driving EV and Tech ETF (IDRV)
- SPDR S&P Kensho Smart Mobility ETF (HAIL)
- Amplify Lithium & Battery Tech ETF (BATT)
- ARK Innovation ETF (ARKK)
Please note, this article is not a recommendation at all, but a content article of knowledge, and we recommend consulting an investment advisor in the absence of knowledge.