War in Ukraine and the U.S. withdrawal from Russian oil, as well as the general global response to phasing out reliance on Russian oil permanently, has led to skyrocketing oil and gas prices. Already consumers are seeing huge increases at the gas pump this week, with no end in sight for now.
Tesla, the biggest producer and seller of electric vehicles in the U.S., has seen the order rate for new vehicles increase 100% this week, reported sources familiar with the matter to Electrek. An increase in orders now however will not lead to an immediate increase in cars delivered as Tesla, like all auto manufacturers, grapples with supply chain constraints and production backlogs.
While delivery timelines are anticipated to grow longer for the popular EV producer, a Gigafactory it is building in Texas should be able to help contribute to production later on this year. Electric vehicle demand is anticipated to grow as consumers feel the financial crunch of soaring gas prices.
Many electric vehicle options have become fairly price equivalent to their internal combustion counterparts; the extra cost has long been a barricade to the purchase of EVs for most consumers. Now, budgeting in for still climbing gas prices will most likely see a wave of new converts to EV ownership but waitlists and supply constraints are still a big issue for the auto industry as a whole.
Tesla has reported it will be delivering new orders of its Model 3, the base option of its line-up, and a September guideline for the Model Y, one of its most popular models.
Investing in Tesla with KARS
For investors looking to capture the increasing demand for EVs with companies such as Tesla as well as major EV producers globally, the KraneShares Electric Vehicles and Future Mobility ETF (NYSE: KARS) offers a good solution.
KARS invests in many familiar car companies such as Tesla, Ford, Mercedes-Benz, GM, BMW, and others, as well as major international EV manufacturers such as Xpeng, Nio, and BYD, some of the biggest companies in the global electric vehicle industry.
KARS measures the performance of the Bloomberg Electric Vehicles Index, which tracks the industry holistically, including exposure to electric vehicle manufacturers, electric vehicle components, batteries, hydrogen fuel cells, and the raw materials utilized in the synthesis of producing parts for electric vehicles.
The index has strict qualification criteria. Companies must be part of the Bloomberg World Equity Aggregate Index, have a minimum free-float market cap of $500 million, and have a 90-day average daily traded value of $5 million.
Tesla (TSLA) is carried in the fund at a 5.09% weighting.
The ETF has an expense ratio of 0.70%.
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