The electric vehicle market appears to be gaining momentum. Beyond market leader Tesla NASDAQ:TSLAElectric vehicle companies are recording new sales records. Six Chinese electric vehicle manufacturers fall into this category. This includes the country’s leaders in this field, such as BYD. OTSMKTS: WILL BE and several smaller Chinese players. Even American automakers such as Ford Motor New York Stock Exchange: F Recently, sales of electric vehicles reached record levels.
However, investing in this area requires caution. In the United States, the recent rise in electric vehicle sales has likely been fueled by anticipated regulatory changes coming from the Trump administration. Trump is widely expected to repeal the $7,500 tax credit on electric vehicles that makes the vehicles more price competitive with their gas-powered counterparts. But even if this hurts the competitiveness of electric vehicles in the US, forecasters still see strong growth in electric vehicle sales in China. Fastmarkets forecasts growth to slow slightly from 31% in 2024. With China still accounting for the vast majority of EV sales, the industry could be moving forward. Below, I’ll detail three ETFs that can benefit you.
FDRV: EV ETF with Significant China Exposure
Fidelity Electric Vehicles ETF and the Transportation of the Future Today
Fidelity Electric Vehicles and Future Transportation ETF
As of 01/10/2025
- Dividend yield
- 0.30%
- Assets under management
- $27.99 million
First up is the Fidelity Electric Vehicles and Future Transportation ETF. Bats: FDRV. As of November 30, 2024, the company’s largest holding is Tesla. It accounts for 6% of the portfolio. Following the electric car story in China, Tesla sales in China also hit a record high in 2024. They grew by almost 9% and accounted for almost 37% of the company’s total vehicle sales. The ETF also includes China’s largest player BYD, which accounts for nearly 4% of the portfolio. Many smaller Chinese firms are also included.
The only American automaker in the portfolio is Rivian. NASDAQ: RIVN. The company recently posted better-than-expected production numbers, sending shares soaring. At least for now, the company has made good on its promise to fix production issues. The rest of the portfolio primarily consists of EV suppliers in the semiconductor industry as well as car sharing companies. The fund’s 0.4% expense ratio makes it a relatively inexpensive way to gain targeted exposure to a portfolio of companies in the electric vehicle market.
EVMT: investing in metals used in electric vehicles
Invesco EV Commodity Strategy #K-1 ETF Today
Invesco Electric Vehicle Commodity Strategy for Metals No. K-1 ETF
As of 01/10/2025 14:27 Eastern
- 52 week range
- $14.47
▼
$19.43
- Dividend yield
- 3.56%
- Assets under management
- $7.38 million
Invesco Electric Vehicle Commodity Strategy for Metals #K-1 ETF NASDAQ: EBMT a little more unique. Like many capital-intensive technologies, the production of electric vehicles uses a variety of natural resources. Thus, this strategy invests in various base metal commodity futures contracts. As production and demand for electric vehicles increases, so will the demand for metals used to make vehicles, driving up their prices. Allocations to nickel, copper and aluminum futures account for more than 78% of the portfolio.
The fund hopes to outperform the S&P GSCI Electric Vehicle Metals Index. This index takes into account the percentage of each type of metal used in a typical electric vehicle to determine the weight of its portfolio. It updates these metal usage percentages twice a year. Since its inception in April 2022, the fund has been able to achieve its goal of outperforming the index by 1%. However, the overall performance was terrible: as of the close on January 7, it fell by 47%. Falling metal prices have plagued the country since their peak in March 2022. However, some believe that prices of key metals such as nickel will recover significantly in the coming years.
CARZ: Diversification into electric vehicles, big tech and autonomous driving
First Trust S-Network Future Vehicles & Technology ETF Today
First Trust S-Network Future Vehicles & Technology ETF
As of 01/10/2025 13:42 Eastern
- 52 week range
- $50.83
▼
$63.10
- Dividend yield
- 1.15%
- Assets under management
- $32.64 million
The latest is the First Trust S-Network Future Vehicles & Technology ETF (CARZ). This fund is significantly more diversified than the other two and has 100 holdings. Its largest holding is also Tesla. However, unlike FDRV, it also has large investments in several Magnificent Seven stocks. Large semiconductor companies are also a key differentiator.
FDRV concentrates its automaker assets primarily on Chinese firms. However, CARZ is investing in electric vehicle manufacturers from many regions. This includes major players in the US, Europe, Japan, Korea, China and the UK. In addition to simply being an electric vehicle fund, it also invests heavily in self-driving companies. It also has some impact on lithium mining companies, as the element is important in the production of electric vehicle batteries. The fund has returned 10% over the past year, largely due to its allocation to large technology companies.
Before you consider the Fidelity Electric Vehicles and Future Transportation ETF, you might want to hear this.
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