Back to top

Image: Bigstock

EV Sales to Hit All-Time High in 2022: ETFs to Tap

Read MoreHide Full Article

The International Energy Agency said 2022 is “expected to see another all-time high for electric vehicle sales, lifting them to 13% of total light duty vehicle sales globally,” as quoted on CNBC. Previously, the IEA said global sales had doubled in 2021 to represent nearly 9% of the car market. Both EVs and lighting are “fully on track for their 2030 milestones” in its net-zero by 2050 scenario.

The IEA has previously specified that electric vehicle sales hit 6.6 million in 2021. In the first quarter of 2022, EV sales came to 2 million, a 75% increase compared to the first three months of 2021. With automation and technological breakthrough emerging rapidly, fast pickup in electric vehicles is in the cards.

In an announcement accompanying its Tracking Clean Energy Progress update, the IEA said there had been “encouraging signs of progress across a number of sectors” but cautioned that “stronger efforts” were required to put the world “on track to reach net zero emissions” by the middle of this century, as quoted on CNBC.

What’s Happening in the Sector?

There has been a global drive on auto manufacturers to cut CO2 emission. The very move to bolster clean energy has led to auto manufacturers’ shift from ICE to EV. Europe and China have apparently been leading the way in CO2 emission, thus promoting EV sales.

Per Deloitte, China will hold 49% of the global EV market by 2030, Europe will account for 27%, and the United States will take about 14% share. Deloitte also forecast that China will achieve a domestic market share of about 48% by 2030, while the United States will have it at 27% and Europe is expected to hold 42% share.

Climate provisions in the Inflation Reduction Act put the United States back on track toward significant emissions reductions, potentially lowering greenhouse gas emission by 40% of 2005 levels. The Biden administration, for instance, looks to cut the sale of gas-powered vehicles to 50% of all new purchases by 2030 (read: Lithium ETFs Set to Surge on Rising EV Demand).

Growing investments in the sector, ranging from batteries to charging cars, will see companies spinning off units as well as go public, said Patrick Steinemann, co-head of Global Mobility Group Investment Banking at Bank of America, a Bloomberg article noted earlier in the year. The global Electric Vehicle Market size is projected to grow from 8,151 thousand units in 2022 to 39,208 thousand units by 2030, at a CAGR of 21.7%, per a report from Marketsandmarkets.

Inside the Key Industry Players & Their Strategies

The United States EV market is almost being supported by Tesla alone with catering to almost half of all EV sales. Tesla now has plans for a sales boost in Germany. Electric vehicle maker Fisker Inc (FSR - Free Report) plans to start selling its Ocean electric sport-utility vehicle (SUV) in India from July 2023. The CEO of the company expects EV sales in India to gain momentum by 2025 – 2026.

Needless to say, the enthusiasm in the EV space has prompted ETF issuers to come up with EV and battery-related funds. In the past two years, there was a surge in the launches of these ETFs, with which investors can tap this accelerating industry.

ETFs in Focus

Global X Autonomous & Electric Vehicles ETF (DRIV - Free Report)

The underlying Solactive Autonomous & Electric Vehicles Index tracks the price movements in shares of companies which are active in the electric vehicles and autonomous driving segments. Tesla (3.56%), Apple (3.07%) and Microsoft (2.794%) are the top three stocks. United States takes the top spot in the 75-stock fund with about 56% exposure. The $917 million-fund charges 68 bps in fees.

SPDR S&P Kensho Smart Mobility ETF (HAIL - Free Report)

The underlying S&P Kensho Smart Transportation Index is comprised of U.S.-listed equity securities of companies domiciled across developed and emerging markets worldwide which are included in the Smart Transportation sector. Plug Power (2.03%), Innoviz Technologies (1.93%) and Tesla (1.88%) round out the top three positions. The $73.6 million-fund charges 45 bps in fees.

iShares Self-Driving EV and Tech ETF (IDRV - Free Report)

The underlying NYSE FactSet Global Autonomous Driving and Electric Vehicle Index comprises of developed and emerging market companies that may benefit from growth and innovation in and around electric vehicles, battery technologies and autonomous driving technologies. Tesla (5.63%), Apple (4.79%) and Qualcomm (4.0%) are the top three stocks of the fund. United States makes up about 52% of the fund. The $430.4 million-fund charges 47 bps in fees.

KraneShares Electric Vehicles And Future Mobility ETF (KARS - Free Report)

The underlying Bloomberg Electric Vehicles Index tracks the equity market performance of companies engaged in the production of electric vehicles or their components or engaged in other initiatives that may change the future of mobility. Tesla (4.30%), Samsung (4.18%) and Albemarle (4.15%) are the top three holdings of the fund. The $240.5-million fund charges 70 bps in fees.

Published in