The Environmental Protection Agency has proposed more aggressive vehicle emissions reductions that would be a major boon to electric vehicle production and sales in the U.S., the third largest EV market globally. The KraneShares Electric Vehicles and Future Mobility ETF (NYSE: KARS) is positioned to capture the continued transition to electric vehicles in the coming years and decades as much of the world moves towards a goal of net zero by 2050.
New proposed changes to tailpipe emissions limits from the EPA Wednesday would equate to roughly 67% of new vehicles sold by 2032 be entirely electric vehicles, reported CNBC. It’s a more aggressive timeline than that previously set by President Biden equating to 50% EV sales by 2030. The proposal focuses on actual emissions versus setting any kind of goalpost for the number of EVs sold.
By limiting emissions in this manner, the new proposal is projected to remove around 10 billion tons of carbon dioxide by 2055 but is expected to meet opposition and challenges as it requires rapid acceleration of the EV transition for auto manufacturers. EV sales in the U.S. currently only account for 5.8% of all new vehicles sold as of last year, though it’s almost double the market share of the previous year at 3.1%.
“This is a very ambitious proposal,” said EPA Administrator Michael Regan on Tuesday. “This proposal solicits a number of ways to achieve these goals and we plan to strategically engage all our stakeholders.”
Invest in the EV Transition With KARS
The KraneShares Electric Vehicles and Future Mobility ETF (NYSE: KARS) offers a good solution for investors looking to capture the potential growth of major EV producers globally that benefit from a supportive regulatory environment. The fund takes not just a global approach to EV exposure but also invests along the entirety of the value chain, offering diversification for EV investors, and is up 5.92% YTD.
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.
KARS invests in many familiar car companies such as Tesla, Ford, and Mercedes-Benz, and major Chinese EV manufacturers such as Li Auto, Nio, and BYD. It also goes a step beyond and invests in the companies that contributed to the EV value chain, such as Samsung, Panasonic, and Albemarle, a major lithium manufacturer.
It has an expense ratio of 0.70%.
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