In this article, we discuss 10 best EV ETFs to invest in. If you want to skip our detailed discussion on the EV market, head directly to 5 Best EV, Battery and Autonomous Driving ETFs.
The International Energy Agency expects a significant increase in electric vehicle sales compared to 2022, with an estimated 35% year-over-year growth, amounting to 14 million units sold by the end of 2023. This uptick is expected to be driven by new purchases, especially in the second half of the year. Electric cars are expected to make up 18% of total vehicle sales for the whole year, given the national policies and incentives supporting the electric vehicle industry. Rising oil prices may further motivate buyers to switch to electric cars. While EV sales are typically low in non-major markets, countries like India, Thailand, and Indonesia experienced remarkable growth in 2022, with sales more than tripling compared to the previous year, reaching 80,000 units. In India, there is a significant increase in EV and component manufacturing, thanks to the government’s $3.2 billion incentive program that has attracted a total of $8.3 billion in investments. Similarly, Thailand and Indonesia are also making efforts to support EV adoption through policy schemes and investment incentives, potentially setting an example for other emerging market economies.
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Global EV manufacturers are leaning towards advanced technology to compete amongst themselves and local industry leaders in the highly competitive Chinese market. China is the world’s largest electric vehicle market, with 5.9 million vehicles sold in 2022. This represents 59% of global EV sales, as reported by Canalys, a technology research firm. Domestic brands dominate the EV market in China, capturing an 81% share, with key players being BYD, Wuling, Chery, Changan, and GAC. BofA Securities predicts that China will maintain its position as the largest EV market globally in 2025, with an estimated 40%-45% market share. Canalys commented in a recent report:
“China’s domestic brands are leading the market in the development and implementation of advanced assisted driving systems, capitalizing on their early-entry advantages in the electric and intelligent vehicle sector. These brands have an edge over other joint ventures in the planning and execution of smart assisted driving systems.”
Similarly, according to BofA analysts:
“China auto makers are accelerating vehicle platform, technology upgrade or innovation, leading to outstanding user experience. China EV products are much more competitive than before, and China will continue to see EV penetration expanding, in our view.”
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The EV infrastructure is also expanding at a rapid pace. In April this year, Walmart Inc. (NYSE:WMT) revealed its plan to install electric vehicle charging stations at thousands of its US stores by 2030. The company will expand its fast-charging network for electric vehicles to Walmart and Sam’s Club locations nationwide, in addition to its existing 1,300 EV stations at 280 stores. In the past, Walmart Inc. (NYSE:WMT) has collaborated with EV charger providers EVgo, Inc. (NASDAQ:EVGO) and Electrify America. With more than 4,700 stores and 600 Sam’s Clubs located within 10 miles of approximately 90% of Americans, Walmart aims to make EV infrastructure reliable and easily accessible, hence promoting the clean energy initiative.
Investing in EV ETFs is a convenient way to access the top EV, battery, and self-driving stocks like Albemarle Corporation (NYSE:ALB), Intel Corporation (NASDAQ:INTC), and Tesla, Inc. (NASDAQ:TSLA).
Our Methodology
We chose ETFs that offer exposure to large-, mid- and small-cap EV stocks to create a well-rounded list of the popular funds. We have also discussed the top holdings of the ETFs to offer better insight to potential investors. These EV ETFs have amassed significant gains in the last 5 years. The list is ranked in ascending order of the 5-Year performance of these ETFs as of August 4, 2023.
Photo by Michael Fousert on Unsplash
Best EV, Battery and Autonomous Driving ETFs
10. KraneShares Electric Vehicles and Future Mobility Index ETF (NYSE:KARS)
5-Year Performance as of August 4: 48.92%
KraneShares Electric Vehicles and Future Mobility Index ETF (NYSE:KARS) tracks the performance of the Bloomberg Electric Vehicles Index, which includes companies involved in electric vehicle production, autonomous driving, shared mobility, lithium and copper production, battery manufacturing, hydrogen fuel cells, and electric infrastructure businesses. The ETF was founded on January 18, 2018, and holds more than $190 million in net assets as of August 3, 2023, along with an expense ratio of 0.72%. KraneShares Electric Vehicles and Future Mobility Index ETF (NYSE:KARS) is one of the EV etfs to invest in.
Tesla, Inc. (NASDAQ:TSLA) is the largest holding of KraneShares Electric Vehicles and Future Mobility Index ETF (NYSE:KARS). On July 19, Tesla, Inc. (NASDAQ:TSLA) reported a Q2 non-GAAP EPS of $0.91 and a revenue of $24.93 billion, outperforming Wall Street estimates by $0.09 and $200 million, respectively. For the second quarter of 2023, Tesla announced new record vehicle deliveries of 466,140, exceeding market expectations.
According to Insider Monkey’s first quarter database, 82 hedge funds were bullish on Tesla, Inc. (NASDAQ:TSLA), compared to 91 funds in the prior quarter. D E Shaw is a prominent stakeholder of the company, with 6.2 million shares worth $1.3 billion.
Baron Opportunity Fund had this to say about Tesla, Inc. (NASDAQ:TSLA) in the first quarter of 2023:
“Tesla, Inc. (NASDAQ:TSLA) designs, manufactures, and sells EVs, related software and components, and solar and energy storage products. Following a sharp decline at the end of 2022, Tesla’s stock rebounded in the first quarter of 2023 on investor expectations that Tesla will continue to grow vehicle deliveries and maintain solid gross and operating margins despite a potential recession, competition in China, and vehicle price reductions. We wrote a long piece on Tesla last quarter and refer readers back to it, because for long-term investors not much has changed over the last three months. Tesla did hold its first Investor Day in March, and several Baron analysts and portfolio managers attended. We toured the Austin Gigafactory, drove in a Cybertruck, boarded a Semi truck, and spoke with a wide swath of Tesla senior managers. During the formal presentation, Tesla highlighted, among other things: (1) its broad and deep bench of executive talent supporting CEO Elon Musk; (2) its “Master Plan 3–Sustainable Energy for All of Earth,” which featured EVs, renewable power from solar and wind, and stationary electric storage; (3) its vehicle assembly innovations, including massive casted parts (building Model Y bodies with single front and rear castings, replacing a substantial number of parts and fastening steps), a stainless steel exoskeleton (for Cybertruck), and its next-generation highly efficient “unboxed process” for its next-gen $25,000 vehicle; (4) a future permanent[1]magnet electric motor that will not require any rare earths; and (5) the massive untapped market opportunity for commercial stationary electric storage, branded Megapack, as the world steadily shifts to renewable energy. As long-term shareholders, we have witnessed Tesla exploit its innovative Model 3/Y now-global mass-market platform to increase vehicle deliveries from barely a standing start to over 1.3 million units, while achieving industry-leading margins and reinforcing its iron-clad balance sheet to almost $23 billion in cash (and effectively no recourse debt). We expect Tesla’s next-generation EV and Megapack products to have a similar impact on company results.”
9. ARK Autonomous Technology & Robotics ETF (BATS:ARKQ)
5-Year Performance as of August 4: 56.48%
ARK Autonomous Technology & Robotics ETF (BATS:ARKQ) is an actively managed ETF, aiming for capital growth over the long term by investing in domestic and international stocks of autonomous transportation, robotics, and energy storage companies. ARK Autonomous Technology & Robotics ETF (BATS:ARKQ) was established on September 30, 2014, and as of June 30, 2023, it maintains an expense ratio of 0.75%. ARK Autonomous Technology & Robotics ETF (BATS:ARKQ) is one of the best EV ETFs to monitor.
UiPath Inc. (NYSE:PATH) is one of the top holdings of ARK Autonomous Technology & Robotics ETF (BATS:ARKQ). The company offers an end-to-end automation platform, specializing in robotic process automation (RPA) solutions. On May 24, UiPath Inc. (NYSE:PATH) reported a Q1 non-GAAP EPS of $0.11 and a revenue of $289.59 million, outperforming Wall Street estimates by $0.09 and $18.35 million, respectively.
According to Insider Monkey’s first quarter database, 36 hedge funds were bullish on UiPath Inc. (NYSE:PATH), with combined stakes worth $1.58 billion. Cathie Wood’s ARK Investment Management is the leading position holder in the company, with 44.8 million shares worth $788.3 million.
In addition to Albemarle Corporation (NYSE:ALB), Intel Corporation (NASDAQ:INTC), and Tesla, Inc. (NASDAQ:TSLA), UiPath Inc. (NYSE:PATH) is one of the top stocks on the radar of hedge funds.
Here is what ClearBridge Investments had to say about UiPath Inc. (NYSE:PATH) in its Q3 2022 investor letter:
“Over the last three months, we similarly exited UiPath Inc. (NYSE:PATH) due to a change to our original thesis as we believe a new go-to-market strategy for its automation software could impact near-term execution. While we think process automation is a growing market, in a slowing macro environment single solutions may be more vulnerable than the platform solutions of software providers who can bundle products to meet a wide range of needs. In addition, the company has a material component of sales sourced in Europe where the economy is more vulnerable.”
8. iShares Self-Driving EV and Tech ETF (NYSE:IDRV)
5-Year Performance as of August 4: 65.90%
iShares Self-Driving EV and Tech ETF (NYSE:IDRV) aims to replicate the performance of the NYSE FactSet Global Autonomous Driving and Electric Vehicle Index. This index comprises companies from developed and emerging markets that stand to benefit from advancements in electric vehicles, battery technologies, and autonomous driving technologies. The ETF was established on April 16, 2019. As of August 3, 2023, iShares Self-Driving EV and Tech ETF (NYSE:IDRV) has net assets worth $475.7 million and holds 53 stocks in its portfolio, along with an expense ratio of 0.47%. It is one of the best EV ETFs to invest in.
XPeng Inc. (NYSE:XPEV) is the largest holding of the iShares Self-Driving EV and Tech ETF (NYSE:IDRV). The company is based in the People’s Republic of China and is involved in the design, development, manufacturing, and marketing of intelligent electric vehicles. In July 2023, XPeng Inc. (NYSE:XPEV) reported delivering 11,008 Smart EVs, indicating a 28% month-over-month increase and marking the company’s sixth consecutive month of delivery growth.
According to Insider Monkey’s first quarter database, XPeng Inc. (NYSE:XPEV) was part of 20 hedge fund portfolios, compared to 17 in the prior quarter. Jos Shaver’s Electron Capital Partners is a prominent stakeholder of the company, with 2.30 million shares worth $25.5 million.
7. iShares Electric Vehicles and Driving Technology UCITS ETF (LON:ECAR.L)
5-Year Performance as of August 4: 74.51%
iShares Electric Vehicles and Driving Technology UCITS ETF (LON:ECAR.L) aims to mirror the performance of the STOXX Global Electric Vehicles & Driving Technology NET Index. This index consists of developed and emerging market companies that are involved in electric vehicles and driving technologies. The ETF was introduced on February 20, 2019, and it holds $974.5 million in net assets as of August 3, 2023. With a portfolio of 97 stocks, iShares Electric Vehicles and Driving Technology UCITS ETF (LON:ECAR.L) offers an expense ratio of 0.40%. It is one of the best EV ETFs to invest in.
Rivian Automotive, Inc. (NASDAQ:RIVN) is the largest holding of the iShares Electric Vehicles and Driving Technology UCITS ETF (LON:ECAR.L). It is an electric vehicle manufacturer that sells five-passenger pickup trucks and seven-passenger SUVs. Rivian Automotive, Inc. (NASDAQ:RIVN) has also collaborated with Amazon to create an Electric Delivery Van using the Rivian Commercial Vehicle platform.
According to Insider Monkey’s first quarter database, Rivian Automotive, Inc. (NASDAQ:RIVN) was part of 31 hedge fund portfolios, compared to 29 in the prior quarter. Daniel Sundheim’s D1 Capital Partners is the leading position holder in the company, with 13.90 million shares worth $215.30 million.
Baron Opportunity Fund made the following comment about Rivian Automotive, Inc. (NASDAQ:RIVN) in its Q1 2023 investor letter:
“Shares of Rivian Automotive, Inc. (NASDAQ:RIVN), a U.S.-based EV manufacturer, fell during the quarter. Despite seven-fold growth in its monthly production rate between late 2021 and the end of 2022, production guidance for 2023 missed analyst forecasts because of supply-chain constraints, principally semiconductors. Moreover, notwithstanding an attractive long-term opportunity and favorable product reviews by customers and industry experts, investors remain concerned about liquidity risks as the company burns cash during its early production stage while unit economics remain challenged. Vehicle sales through the end of 2023 will be at Rivian’s legacy vehicle pricing, which was set before inflationary and supply-chain pressures emerged last year across the entire automotive space. New pricing and improved unit economics should be realized in 2024, and Rivian is slated to launch its R2 vehicle line in 2026. We have adjusted Rivian to a smaller position in our portfolio. Despite near-term macro and execution risks, we do believe that Rivian’s current valuation offers attractive long-term returns. During the year, we will remain focused on Rivian’s production ramp, vehicle demand, unit-level economics, and cost controls as well as progress on its R2 vehicle platform, its next-gen Enduro electric motor, and its battery system advancements.”
6. WisdomTree Battery Solutions UCITS ETF (LON:CHRG.L)
5-Year Performance as of August 4: 79.53%
WisdomTree Battery Solutions UCITS ETF (LON:CHRG.L) aims to replicate the price and net dividend performance of the WisdomTree Battery Solutions Index. The ETF provides targeted exposure to companies offering battery and energy storage solutions while also meeting WisdomTree’s environmental, social, and governance (ESG) standards. Launched on February 26, 2020, WisdomTree Battery Solutions UCITS ETF (LON:CHRG.L) has just over $339 million in assets under management as of August 4, 2023. Its expense ratio is 0.40%. WisdomTree Battery Solutions UCITS ETF (LON:CHRG.L) is one of the best EV ETFs to invest in.
Joby Aviation, Inc. (NYSE:JOBY) is the largest holding of WisdomTree Battery Solutions UCITS ETF (LON:CHRG.L). Joby Aviation, Inc. (NYSE:JOBY) is focused on developing electric vertical takeoff and landing aircrafts for an aerial ridesharing service. On July 6, Joby Aviation, Inc. (NYSE:JOBY) disclosed that it has submitted all its certification plans to the Federal Aviation Administration (FAA). This move signifies notable advancement towards obtaining commercial certification for its aircraft, reaching the third stage out of five required for the process.
According to Insider Monkey’s Q1 database, 15 hedge funds were long Joby Aviation, Inc. (NYSE:JOBY), compared to 17 funds in the prior quarter.
Like Albemarle Corporation (NYSE:ALB), Intel Corporation (NASDAQ:INTC), and Tesla, Inc. (NASDAQ:TSLA), Joby Aviation, Inc. (NYSE:JOBY) is one of the prominent stock picks of hedge funds this year.
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Disclosure: 10 Best EV, Battery and Autonomous Driving ETFs is originally published on Insider Monkey.