Electric vehicle (EV) demand could finally be catching up with supply as seen in Q2 sales numbers. In turn, this could push EV-focused exchange-traded funds (ETFs) higher, allowing for potential plays in a pair of leveraged Direxion ETFs.
According to a report from Cox Automotive, the sale of EVs grew 11.3% year over year during Q2, which touched a record volume of 330,463 units based on estimates from Kelley Blue Book. This was due to factors such as the availability of vehicles, price discounts, and leasing options.
Moreover, the sale of EVs accounted for 8% of new vehicle sales during Q2. This was 0.9% higher compared to the previous quarter and 0.8% higher compared to the same quarter in 2023.
“EV sales exceeded expectations during a record-breaking quarter," noted Cox Automotive Industry Insights Director Stephanie Valdez Streaty. "Despite Tesla’s declining sales, with its EV sales share now below 50% for the first time, the overall competitive landscape for electric vehicles is intensifying. This increased competition is leading to continued price pressure, gradually boosting EV adoption. Automakers that deliver the right product at the right price and offer an excellent consumer experience will lead the way in EV adoption.”
A Pair of Leveraged Options
If the sales trends persist, traders may want to consider the +Direxion Daily Electric and Autonomous Vehicles Bull 2X Shares+ (EVAV ), which seeks to achieve 200% of the daily performance of the Indxx US Electric and Autonomous Vehicles Index. It’s an ideal option for broad-based exposure to the EV market with double leverage to maximize gains.
The index provides exposure to 25 U.S.-listed companies poised to disrupt the existing transportation market by bringing new and cleaner modes of transportation, such as electric and autonomous vehicles. It includes companies beyond vehicle manufacturers to paint a more holistic picture of the industry. The index includes charging station manufacturers such as ChargePoint and Blink, companies involved in software development and the manufacturing of various electrical components, and electric vehicle manufacturers such as Tesla, Lucid, and NIO.
A single-stock ETF play worth considering is Tesla, which appears to be shaking off its slump. The U.S.-based electric automaker is down 11% within the past year, but is gaining momentum recently with almost a 40% gain the past month. If this upward price trend continues, traders can use the Direxion Daily TSLA Bull 2X Shares (TSLL ) for additional exposure to its upside.
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