EV ETFs: The Evolving Electronic Vehicle Market

How to invest in EV ETFs to capture growth in the electronic vehicle market.

kent
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Research Lead
Reviewed by: Lisa Barr
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Edited by: Lisa Barr

Investing in electric vehicle ETFs can be a way for investors to gain exposure to the evolving EV market, which is expected to see significant growth in the coming years due to increasing demand for electric vehicles as well as government incentives and mandates aimed at reducing carbon emissions from transportation.  

We highlight different types of EV ETFs and the trends propelling this industry forward. 

What Are EV ETFs? 

EV ETFs are exchange-traded funds that invest in companies involved in the production or development of electric vehicles (EVs) or related technologies. These funds typically invest in a diversified portfolio of companies engaged in various aspects of the EV supply chain, such as battery manufacturers, EV producers, charging infrastructure companies and component suppliers. 

EVs include battery electric vehicles, plug-in hybrid electric vehicles and hydrogen fuel cell vehicles.  

EV Industry Trends Charging Future Growth 

There are multiple factors and trends, according to data from the Bureau of Labor and Statistics, that are driving the growth of the EV market. Some of the factors for growth trends from the recent past include increased consumer interest, government policies and buy-in from the auto industry. 

An emerging trend that could drive EV growth further in the future is increased access to EV charging stations. Since a lack of charging infrastructure is a major barrier to EV adoption, more charging stations would naturally contribute to future EV growth by making it more attractive to own EVs. 

Providing momentum for this trend, in April 2023, Walmart announced in a press release that it plans to install new electric vehicle fast-charging stations at thousands of Walmart and Sam’s Club locations across the country. 

Types of EV ETFs 

There are several types of EV ETFs, each with its own investment strategy and focus.  

Here are some of the most common types: 

  • Broad-Based EV ETFs: These funds invest in companies across the entire EV supply chain, from battery and component manufacturers to electric vehicle producers and charging infrastructure companies.  
  • Global EV ETFs: These funds invest in EV companies around the world, providing investors with exposure to the global EV market. 
  • Clean Energy ETFs: While not specific to EVs, these funds invest in companies involved in renewable energy and clean technology, including EVs. 
  • Battery Technology ETFs: These funds invest in companies involved in the development, manufacturing and supply of batteries, which are a key component of electric vehicles. 
  • Autonomous Vehicle ETFs: These funds invest in companies involved in the development of self-driving technology, which is expected to be a key driver of the growth of the EV market. 
  • Thematic ETFs: Some ETFs, such as thematic ETFs, are designed around specific themes, such as climate change, which may include a focus on EVs and related technologies. 

Examples of Popular EV ETFs 

Here are some examples of popular EV ETFs: 

Bottom Line 

While EV ETFs can capture the growth of electronic vehicles market through a range of EV fund types, it's important to note that these funds may be more volatile than broader market funds due to their narrow focus on a specific sector.  

Investors should consider their investment goals and risk tolerance before committing to any of these ETF types.  

 

See also: etf.com Guide: How to Invest in the Electric Vehicle Revolution With ETFs 

Kent Thune is Research Lead for etf.com, focusing on educational content, thought leadership, content management and search engine optimization. Before joining etf.com, he wrote for numerous investment websites, including Seeking Alpha and Kiplinger. 

 

Kent holds a Master of Business Administration (MBA) degree and is a practicing Certified Financial Planner (CFP®) with 25 years of experience managing investments, guiding clients through some of the worst economic and market environments in U.S. history. He has also served as an adjunct professor, teaching classes for The College of Charleston and Trident Technical College on the topics of retirement planning, business finance, and entrepreneurship. 

 

Kent founded a registered investment advisory firm in 2006 and is based in Hilton Head Island, SC, where he lives with his wife and two sons. Outside of work, Kent enjoys spending time with his family, playing guitar, and working on his philosophy book, which he plans to publish in the coming year.