Although U.S. enthusiasm continues to wane in the short-term for electric vehicles, global demand remains resilient. Savvy investors looking to capture growing EV demand would do well to consider the KraneShares Electric Vehicles and Future Mobility ETF (KARS ).
According to Rho Motion, global demand for EVs will continue to grow this year, despite recent U.S. slowing. The research firm estimates 20 million electric vehicles sold this year, a growth of 17%, reported Reuters. They anticipate increased demand in Europe, China, and Latin America. While the firm hasn’t lowered estimates for U.S. sales this year (forecasted growth of 16%), they expressed caution around policy impacts longer-term on battery demand.
“In the US market, a lot of uncertainty has obviously hit the market in the last year or so, and we are expecting reduced EV forecasts,” Iola Hughes, Rho Motion head of research, explained to Reuters. “However, the shift to electric vehicles is still very much happening and we will still see growth over the next decade.”
While electric vehicle enthusiasm may be faltering in the U.S., in the largest EV market, it’s flourishing. Sales of new energy vehicles in China hit a record high in December, the fourth consecutive month of record-breaking sales. That’s according to data from the China Association of Automobile Manufacturers (CAAM), reported CnEVPost.
NEV sales in China for 2024 totaled 12.87 million, making up nearly 41% of all car sales in the world’s second-largest economy. CAAM forecasts for NEVs to account for approximately 50% of all vehicle sales this year in China. They estimate 16 million NEVs sold out of a total of 32.9 million vehicles.
Harness Growing Global Electric Vehicle Demand With KARS
Investors who to capture ongoing demand or get ahead of increased U.S. demand looking ahead should consider KARS. It provides investors with exposure to the breadth of the electric vehicle industry. The fund takes not just a global approach to EV exposure, but also invests along the entirety of the value chain.
The ETF measures the performance of the Bloomberg Electric Vehicles Index, which tracks the industry holistically. This includes exposure to electric vehicle manufacturers, electric vehicle components, and batteries. It also includes hydrogen fuel cells and the raw materials used in the synthesis of producing parts for EVs.
The fund invests in major EV car manufacturers such as BYD, Li Auto, and Tesla. It also goes a step beyond and invests in the companies that contribute to the EV value chain. These include Samsung, Panasonic, and Albemarle, a major lithium manufacturer.
KARS carries an expense ratio of 0.72%.
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