Investors looking to gain exposure to the driverless car revolution now have the option to buy exchange-traded funds (ETFs) specifically dedicated to driverless cars, electric vehicles and other automotive industry innovations.
Among this class of ETFs are the KraneShares Electric Vehicles and Future Mobility ETFs (CARS), which debuted in January 2018; Capital Link Global Green Energy Transport and Technology Leaders ETF (TO BRING); launched in February 2018, and Global X Autonomous & Electric Vehicles ETF (CONDUCT), which debuted in April 2018. Prior to the introduction of these specific ETFs, there were no ETFs directly related to self-driving cars and electric vehicles, and only one ETF focused on the automotive industry.
Key points to remember
- Investors wishing to gain exposure to the driverless car revolution now have the option of buying exchange-traded funds (ETFs) specifically dedicated to driverless cars, electric vehiclesand other innovations in the automotive industry.
- KraneShares Electric Vehicles and Future Mobility ETF, Capital Link Global Green Energy Transport and Technology Leaders ETF and Global X Autonomous & Electric Vehicles ETF are ETFs invested in driverless cars, electric vehicles and other innovations in the automotive industry.
- People looking to invest in driverless cars also have the option of adding ETFs focused on the automotive industry and related technology innovations to their portfolio, including First Trust’s S-Network Future Vehicles & Technology ETF or ARK Invest’s Autonomous Technology & Robotics ETF.
KraneShares Electric Vehicles and Future Mobility ETF (KARS)
KraneShares Electric Vehicles and Future Mobility ETF (CARS) had net assets of $263 million and a stake of 0.70% expense ratio, as of August 5, 2022. The fund tracks the performance of the Bloomberg Electric Vehicles Index, which invests in global companies not only involved in the production and/or components of electric vehicles. but also “autonomous driving, shared mobility, lithium and/or copper production, lithium-ion/lead batteries, hydrogen fuel cell manufacturing and electrical infrastructure activities”.
Capital Link Global Green Energy Transport and Technology Leaders ETF (EKAR)
The Capital Link Global Green Energy Transport and Technology Leaders ETF (TO BRING) is comprised of global stocks related to self-driving or self-driving electric vehicles as well as renewables/battery storage. The fund invests in companies across five industry categories: battery producers, original equipment manufacturers, suppliers, semiconductor and software producers, and renewable energy producers. The ETF held relatively low net assets of $7.82 million with an expense ratio of 0.65% as of August 5, 2022. The fund tracks the AF Global Green Energy Transport and Technology Leaders Index.
ETF Global X Autonomous & Electric Vehicles (DRIV)
The Global X Autonomous & Electric Vehicles ETF (CONDUCT) aims to match the Solactive Autonomous and Electric Vehicles Index. The fund invests in companies involved in the development and manufacture of software and hardware for driverless vehicles, and in companies that produce electric vehicles and their components, such as lithium and cobalt. As of August 5, 2022, the fund had net assets of $1.01 billion and an expense ratio of 0.68%.
Related Exchange Traded Fund Options
People interested in investing in driverless cars also have the option of adding ETFs focused on the automotive industry and related technological innovations to their portfolio.
- First Trust S-Network Future Vehicles & Technology Fund (CARZ) was launched in 2011, and until 2018 it was the only ETF related to the automotive industry. As of August 5, 2022, the fund had $56 million in net assets with an expense ratio of 0.70%. The ETF tracks the S-Network Electric & Future Vehicle Ecosystem Index, which invests in companies around the world involved in electric and autonomous vehicle manufacturing, enabling technologies and enabling materials. Holdings include Tesla (TSLA), NVIDIA Corp (NVDA), Apple Inc. (AAPL), Qualcomm Inc. (COMQ), and Microsoft Corp (MFST).
- Another broader investment option related to driverless cars is ARK Invest’s Autonomous Technology & Robotics ETF (ARKQ). The fund was launched in 2014 and reached $1.1 billion in net assets as of June 30, 2022. ARKQ has an expense ratio of 0.75%. It is an actively managed fund that invests in companies that are not only involved in autonomous technology, but also in robotics, 3D printing and energy storage. Together, they represent nearly 88% of the portfolio’s assets. The top three sectors, Industrials, Information Technology and Consumer Discretionary, together account for approximately 91% of the sector allocation.
- ETF investors can also consider a fund like the First Trust Clean Edge Green Energy Index Fund (QCLN). Launched by First Trust in 2007, the ETF focuses on companies involved in the supply of clean alternative energy, such as solar photovoltaic energy, wind energy, advanced batteries, fuel cells. Now the fund includes electric cars. There is significant overlap between companies involved in the development of driverless cars and those involved in clean energy. This fund, which tracks the NASDAQ Clean Edge Green Energy Index of U.S.-listed companies committed to clean energy development, had $2 billion in net assets as of August 5, 2022 and an expense ratio by 0.58%. Automobile and semiconductor makers, which are key to creating driverless car technology, account for about a third of portfolio holdings.
Another indirect way to invest in the growth of electric vehicles is to invest in ETFs that follow lithium or related actions. Lithium is an mined element that is an essential component of rechargeable batteries.
Which companies make fully electric vehicles?
While Tesla Motors may be the most popular electric car company, many traditional automakers have started selling all-electric vehicles such as GM, Toyota, Hyundai, Ford, and Kia, among others.
What is the difference between an all-electric and hybrid vehicle?
An all-electric vehicle only runs on batteries, which are most often recharged by plugging in the vehicle. A hybrid electric vehicle, on the other hand, has a gasoline engine and a small electric motor. The electric motor is recharged by the car’s braking system and is used to increase overall gas mileage.
What percentage of vehicles in the United States are electric?
In 2022, less than 1% of the country’s 250 million vehicles will be electric. The Biden administration, however, has set a goal to increase that figure to at least 50% by 2050.