Megaphone icon ETF Database is now VettaFi. Read More >
ETFdb Logo
ETFdb Logo
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • Entrepreneur ETF
    • Equity ETF
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Future ETFs
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Modern Alpha
    • Multi-Asset
    • Multi-Factor
    • Nasdaq Investment Intelligence
    • Portfolio Strategies
    • Retirement Income
    • Smart Beta
    • Thematic Investing
    • Volatility Resource
  • Database
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
    • ETFs Future-Forward 2021: An iShares Investing Symposium
    • Three Themes for 2021: An iShares & MSCI Investing Symposium
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Videos & Podcasts
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Big Ideas Channel
  2. Investors Tap Into New Opportunities As EV Sales Surge
Big Ideas Channel
Share

Investors Tap Into New Opportunities As EV Sales Surge

Special to ETF DatabaseOct 05, 2021
2021-10-05

By Putnam Investments

When a sector is strong in the face of widespread economic weakness, active investors take notice. Despite a global pandemic that caused car sales to drop 16%, a report by the International Energy Agency (IEA) noted that electric vehicle (EV) registrations actually increased by 41%. By the end of 2020, there were an estimated 11 million EVs on the road globally, including 10 million passenger cars.

The EV sector stands to be a key beneficiary of government policies that encourage the production and purchase of electric vehicles. In the United States, the infrastructure package proposed by the White House, while still under negotiation, includes significant funds earmarked for EVs.

Among specific policy goals, the administration seeks to fund 500,000 charging stations as well as offer a rebate to consumers who buy EVs. Other countries are enacting similar measures. Germany, for instance, decided last year to extend EV subsidies to 2025 and doubled the financial incentives available to consumers.

Projected growth of the EV market

Sources differ on the speed of EV adoption over the coming decade. On the conservative end, BloombergNEF’s Electric Vehicle Outlook projects 116 million electric vehicles will be on the road by 2030. A more bullish forecast is offered by the IEA. Given current government policies, they believe there could be 145 million EVs in use 10 years from now, comprising 7% of all road transportation. And the IEA suggests that more aggressive climate programs could result in up to 230 million EVs on the road by 2030.


Content continues below advertisement

Companies set to benefit from EV adoption

The most obvious industry that should benefit from increasing adoption of EVs is automotive. But auto manufacturers are far from being the only companies that may grow as the world buys more and more electric vehicles. Looking down the supply chain, other companies such as those that produce the specialized batteries necessary for EVs, those that make charging stations, and those in the semiconductor sector are poised for growth.

Top 5 EV Producers

Why durability matters from an investment standpoint

Professional, active management can play a key role in identifying opportunities from the expected growth of the EV market. Investors can benefit from the careful research and expertise of a team of analysts and portfolio managers who are closely following the evolution of the electric vehicle supply chain, public policy, and consumer trends.

One benefit of investing in this wider EV ecosystem is the potential for gains that are durable. Durability matters because of the challenge of forecasting growth far into the future. Investors are more likely to misprice long-term growth than short-term growth. To assess durability, it can help to have a disciplined research process with a focus on this question, and to benefit from experience with it over time.

It may be, for example, that the companies that provide the products necessary for electric vehicles have more predictable growth and staying power than some of the EV manufacturers themselves. If nothing else, fishing in a bigger pond means more opportunities for diversification. The leading EV firm, Tesla, trades at quite high valuations, making it potentially more volatile. Complementing a position in Tesla with other EV firms may be a smart strategy for the EV growth trend.

For more news, information, and strategy, visit the Big Ideas Channel.

Loading Articles...
Help & Info
  • Contact Us
  • Mission Statement
  • Press
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © ETF Flows LLC
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

Equity ETF Channel

Retirement Portfolio Redux: Is the 60%-40% Portfolio Dead?

Debbie CarlsonOct 22, 2020
2020-10-22

With the 10-year U.S. Treasury yield hovering below 1% and Federal Reserve Chairman Jerome Powell...

Equity ETF Channel

Portfolio Diversification Isn't Dead, It Was Just Sleeping

Debbie CarlsonOct 15, 2020
2020-10-15

Investors could be forgiven to think there was no reason to invest outside of the U.S. for the...

}
X