by Ian Cooper
Use any signs of weakness in the EV market as opportunity.
For one, demand is accelerating. According to the International Energy Agency, about a fifth of all cars will be electric this year. Sales are expected to grow by 35% globally to 14 million this year. The agency also noted that “more than 26 million electric cars were on the world’s roads in 2022, which represents a 60% increase relative to 2021,” as noted by CNBC.
There’s so much demand, companies like BYD just saw net income explode 411% in its first quarter, year over year. Li Auto just reported April sales growth of 516% year over year. But that’s just the start. With more EVs likely to hit the roads, there’s still plenty of opportunity in these top electric vehicle stocks to buy.
Even more impressive, “Electric car sales — including battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) — exceeded 10 million last year, up 55% relative to 2021,” according to the IEA, as noted by CNBC. “This figure — 10 million EV sales worldwide — exceeds the total number of cars sold across the entire European Union (about 9.5 million vehicles) and is nearly half of the total number of cars sold in China in 2022.”
Not only is that great news for electric vehicle stocks, like Tesla, BYD, and Li Auto, it’s also great news for the EV metal stocks and ETFs, including:
iShares Self Driving EV and Tech ETF (IDRV)
One of the best ways to diversify at a low cost is with an ETF, such as the iShares Self Driving EV and Tech ETF (IDRV). With an expense ratio of 0.47%, the IDRV ETF gives me access 59 EV-related stocks, such as Li Auto, Aptiv, BYD Ltd., Tesla, Samsung, Ganfeng Lithium, QuantumScape, ChargePoint Holdings, and dozens more.
KraneShares Electric Vehicles and Future Mobility ETF (KARS)
The Krane Shares Electric Vehicles and Future Mobility ETF (KARS) is starting to accelerate, too. With an expense ratio of 0.70%, this ETF provides exposure to companies involved in the production of EVs and their components.
It’s also benchmarked to the Bloomberg Electric Vehicles Index, which includes stocks involved with electric vehicle production, autonomous driving, shared mobility, lithium and/or copper production, lithium-ion/lead acid batteries, hydrogen fuel cell manufacturing, and electric infrastructure businesses, according to KraneShares.com. Some of its top holdings include Albemarle, BYD Co., Tesla, Panasonic Holdings, Aptiv, Samsung, and Lucid Group to name a few.
Global X Autonomous & Electric Vehicles ETF (DRIV)
With the electric vehicle boom only set to accelerate, investors should have good exposure.
One of the best ways to diversify in such a sector at less cost is with an ETF. Look at the Global X Autonomous & Electric Vehicles ETF (DRIV), for example.
This ETF invests in “companies involved in the development of autonomous vehicle technology, electric vehicles, and EV components and materials. This includes companies involved in the development of autonomous vehicle software and hardware, as well as companies that produce EVs, EV components such as lithium batteries, and critical EV materials such as lithium and cobalt,” as noted by Global X.