The electric vehicle revolution continues to pick up speed.
Industry estimates predict 10 million new electric vehicles will be sold in 2022 worldwide. That’s almost 10 times the total from 2017. And with the current prices of gasoline and diesel making EVs appealing from both a financial and an environmental perspective, there’s no doubt this trend will continue in 2023 and beyond. One way to play EVs is to pick and choose individual stocks, but there’s no guarantee today’s leaders like Tesla Inc. (ticker: TSLA) will stay at the head of the pack. Instead, many investors may want to take a diversified approach to the industry via electric vehicle exchange-traded funds, or ETFs, that play new entrants, evolving legacy manufacturers and the battery technology companies that support the entire ecosystem. The following seven electric vehicle ETFs do that in various ways.
Global X Lithium & Battery Technology ETF (LIT)
LIT is the largest electric vehicle ETF on this list. It’s worth noting that if you’re looking for a big stake in Tesla, however, you may want to keep browsing through the next few funds. The portfolio of about 40 stocks comprises lithium miners and battery technology companies. Roughly 16% of assets sit with the top-two companies alone: Charlotte, North Carolina-based lithium giant Albemarle Corp. (ALB) and top Chinese battery firm EVE Energy Co. Ltd. (300014). But if you truly believe in the EV revolution, this Global X fund gets you in on the ground floor by playing the power source instead of a specific car manufacturer.
— Assets under management: $3.8 billion.
— Expense ratio: 0.75%, or $75 annually on every $10,000 invested.
— Top holding: Albemarle at 10.8%.
ARK Autonomous Technology & Robotics ETF (ARKQ)
Though you won’t find the phrase “electric vehicle” in this fund’s name, this ARK offering has roughly one-tenth of its assets behind U.S. EV giant Tesla and offers exposure to other similar companies that are looking beyond just battery tech to long-term evolution of automobiles. You will also get some tangential plays, like tech firm Trimble Inc. (TRMB), which offers geospatial technology for construction and agricultural applications. But if you want to think outside the box when it comes to next-gen cars, ARKQ is worth a look.
— Assets under management: $870 million.
— Expense ratio: 0.75%.
— Top holding: Tesla at 9.7%.
Global X Autonomous & Electric Vehicles ETF (DRIV)
This Global X fund also offers exposure to some of the technology companies that are working on self-driving functionality and EV manufacturing. Among its 80 or so holdings you’ll find names like legacy automaker Toyota Motor Corp. (TM) as well as megacap Big Tech icons such as Microsoft Corp. (MSFT). However, the portfolio doesn’t have more than about 3% in a single holding, so it is perhaps one of the most diversified ways to play this trend.
— Assets under management: $850 million.
— Expense ratio: 0.68%.
— Top holding: Nvidia Corp. (NVDA) at 3.1%.
iShares Self-Driving EV and Tech ETF (IDRV)
Perhaps the broadest fund on this list, IDRV has almost 120 total components from around the world to cover just about every aspect of the EV revolution. With a list that deep, you’re likely to get some tangential players. Among the top components at present are Irish power management company Eaton Corp. PLC (ETN) and Swiss electrification specialist ABB Ltd. (ABB). So if you want a broad and global approach instead of the usual suspects of U.S. or Chinese EV stocks, this iShares fund is worth a look.
— Assets under management: $440 million.
— Expense ratio: 0.47%.
— Top holding: Eaton Corp. at 4.4%
KraneShares Electric Vehicles & Future Mobility ETF (KARS)
Smaller ETF shop KraneShares may not be as high profile as these other providers, as it has just more than $200 million in assets at present, but it’s also an interesting option for investors looking for the best electric vehicle ETFs right now. The portfolio of about 70 stocks is different than the previously mentioned ETFs in that it has core battery players in the U.S. but also overseas — led by Korea’s Samsung SDI Co. Ltd. (006400) that is the dedicated battery materials subsidiary of the broader corporate parent of the same name.
— Assets under management: $210 million.
— Expense ratio: 0.70%.
— Top holding: Samsung SDI at 5.7%.
Amplify Lithium & Battery Technology ETF (BATT)
The smallest fund on this list, BATT is still worth a look because it has enough assets under management to make it viable in the medium term. It also boasts daily trading volume north of 60,000 shares, making it relatively liquid. A similar bent to the dominant iShares battery technology fund that started this list, the Amplify fund offers an alternative with just 28% of its assets in China. That compares with 34% for LIT at present. If you don’t mind a bit more liquidity risk in exchange for a smaller footprint in Asia, BATT could be worth a look.
— Assets under management: $170 million.
— Expense ratio: 0.59%.
— Top holding: BHP Group Ltd. (BHP) at 8%.
ARK Innovation ETF (ARKK)
The last ETF on this list is actually the largest. But it’s perhaps unfair to characterize it as a direct play on EVs — or even a direct play on next-gen transit. Instead, it’s an actively managed fund that seeks out innovation in all corners of the marketplace. That definitely includes electric vehicles, as ARKK holds a roughly 8% weighting in Tesla as its No. 2 holding at present. But the fact that video conferencing giant Zoom Video Communications Inc. (ZOOM) is No. 1 and streaming media player Roku Inc. (ROKU) is No. 3 means this fund is clearly about more than cars. Still, if you want to hedge your bets and play broader innovation trends alongside EVs, ARKK could be worth a look.
— Assets under management: $7.7 billion.
— Expense ratio: 0.75%.
— Top holding: Zoom at 8.9%.
7 electric vehicle ETFs to buy:
— Global X Lithium & Battery Technology ETF (LIT)
— ARK Autonomous Technology & Robotics ETF (ARKQ)
— Global X Autonomous & Electric Vehicles ETF (DRIV)
— iShares Self-Driving EV and Tech ETF (IDRV)
— KraneShares Electric Vehicles & Future Mobility ETF (KARS)
— Amplify Lithium & Battery Technology ETF (BATT)
— ARK Innovation ETF (ARKK)
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7 Electric Vehicle ETFs to Buy originally appeared on usnews.com
Update 12/06/22: This story was previously published at an earlier date and has been updated with new information.
