Are You Ready to Electrify Your Investments with Thematic EV Magic?

Thematic investing involves creating a portfolio by gathering a collection of companies involved in certain areas that you predict will generate above-market returns over the long term. One such theme that has surged in popularity over the last decade is electric vehicles or EVs.  

The global shift towards sustainable energy solutions has opened unprecedented opportunities for investors. Electric vehicles, at the forefront of this transformation, are not just a means of transportation but a revolutionary force reshaping the automotive industry. As we believe the EV market is set to soar to new heights, let’s explore the opportunities for thematic investment in electric vehicles. 

Electric Vehicles – The future of the automobile industry 

Electric vehicles represent a powerful thematic investment opportunity, driven by factors such as: 

Environmental Concerns: Pollution caused by greenhouse gases (carbon dioxide) is one of the burning environmental concerns in this age. Carbon emissions by petrol and diesel road vehicles are one of the biggest causes of pollution. As governments worldwide intensify their commitment to reducing carbon emissions, EVs may be the key to achieving zero-emission targets.  

Technological Advancements: Rapid advancements in battery technology, charging infrastructure, and autonomous driving capabilities are propelling the EV sector into a new era of innovation. 

Policy Support: Governments worldwide are implementing policies and offering incentives to boost the adoption of electric vehicles, creating a favorable environment for investors. 

Why Invest in Global EVs?

• The global market size of EVs is expected to grow at a CAGR of 35% to 39% from 2020 to 2030 in terms of several cars sold. EVs are expected to comprise 8 – 11% of total auto stock by 2030. 

• The sale of electric vehicles globally has been growing at a CAGR of nearly 50% over the last 10 years end and Consumer appetite for EVs is increasing. A recent survey revealed that 7 out of 10 U.S. drivers would be interested in buying when EV charging infrastructure expands, and EV costs drop. 

• Better lithium-ion technology will increase the amount of lithium used in each EV battery. Lithium demand is expected to more than double by 2030. 

The Investment Opportunities and Risks 

As we already know, the electric vehicle ecosystem tends to be broad and includes many industries, so owning the entire basket rather than owning one or two companies alone tends to better diversify risks and provide a more balanced approach.

Here are a few ETFs for investors seeking diverse exposure to the electric vehicle industry: 

• KraneShares Electric Vehicles & Future Mobility Index ETF (KARS) 

• Global X Autonomous & Electric Vehicles ETF (DRIV) 

• Global X Lithium & Battery Tech ETF (LIT)