Is It Time To Buy These ETFs On A Sudden Slowdown In EV Sales?
Zacks Investment Research | Sep 11, 2019 02:30AM ET
Electric powered vehicles, once a popular and fast-growing area (thanks mainly to technological advancement and improving cost economics), is gradually slowing down. Global electric car sales 20% of the country’s total vehicle sales by 2025 .
Along with China’s passenger vehicle sales, sales of NEVs (new energy vehicle) dropped for the marketrealist.com .
Apart from subsidy cuts, China’s electric autonomous vehicles company Nio recently replaced all of the affected battery packs third-worst full month since it started deliveries in June 2018.”
Short-Term Glitch, Long-Term Gain?
Global plug-in vehicle deliveries were 2.1 million units for 2018, marking a 64% rise from 2017 levels and 2.4% of the world’s overall 86 million units sold last year. “IHS Markit sees EV market share inching up over the next half decade — reaching about 7.6 percent of total new vehicle sales worldwide by 2025.”
“Despite expected short-term weakness in 2019, we continue to be positive on long-term EV demand.” Per Bernstein analysts, EV sales grew 34% in Europe in July despite declines in China and North America.
Demand for metals used in battery electric vehicles could increase six-fold if electric cars can touch 8% of road traffic by mid-2020s, delivering huge dividends for producing countries like Democratic Republic of Congo, per Moody’s as quoted on Reuters . Other countries like Peru, Chile and the Philippines should also gain traction from increased exposure to EV adoption over the long term.
Against this backdrop, investors can bet on the following ETFs with a long-term view.
ETFs in Focus
Global X Autonomous & Electric Vehicles ETF DRIV
Innovation Shares NextGen Vehicles & Technology ETF EKAR
KraneShares Electric Vehicles and Future Mobility Index ETF KARS
Global X Lithium & Battery Tech ETF (ASX:LIT)
Amplify Advanced Battery Metals and Materials ETF (TSXV:BATT)
iShares MSCI Peru ETF EPU
iShares MSCI Chile Capped ETF ( (WA:ECH) )
iShares MSCI Philippines ETF (EPHE )
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