VW Accelerates Chinese EV Automation; Get Exposure With ARKQ

Volkswagen has struck a new partnership to accelerate its pace in automating electric vehicles for Chinese customers, in a move that will be good for disruptive tech ETFs like ARKQ.

CARIAD, a wholly owned automotive software company of Volkswagen, intends to establish a joint venture with Horizon Robotics, a Chinese auto chip startup, the company announced last Thursday.

Volkswagen’s 2.4-billion-euro investment in the joint venture with Horizon Robotics aims to build full-stack autonomous driving software and hardware systems, Tasha Keeney, director of investment analysis & institutional strategies at ARK Invest, wrote in an October 17 newsletter.

Despite the investment risks associated with China’s weakening economy, Volkswagen could be feeling pressure to accelerate the development of fully autonomous cars in its largest market, Keeney said.

“In our view, robotaxis will become winner-takes-most markets by geography. Companies in the U.S. and China appear to be moving faster than European competitors,” Keeney wrote. “Its new venture is likely to add another layer of complexity to VW’s already-complicated corporate structure as the company regroups after ousting its CEO.”

Investors looking to gain exposure to the lucrative AI industry should consider the ARK Autonomous Technology & Robotics ETF (ARKQ)

Companies within ARKQ are focused on and are expected to substantially benefit from the development of new products or services, technological improvements, and advancements in scientific research related to, among other things, energy, automation and manufacturing, materials, artificial intelligence, and transportation.

Holdings in ARKQ may develop, produce, or enable autonomous transportation, robotics and automation, 3D printing, energy storage, and space exploration. 

Top holdings in the fund as of October 19 include Tesla (TSLA, 10.16%), Trimble Inc (TRMB, 8.62%), Kratos Defense & Security (KTOS, 7.09%), Iridium Communications Inc (IRDM, 6.87%), UiPath Inc (PATH, 6.19%), Deere & Co (DE, 6.11%), Aerovironment Inc (AVAV, 4.42%), Teradyne Inc (TER, 4.56%), Komatsu Ltd (KMTUY, 3.42%), and Elbit Systems Ltd (ESLT, 2.75%). 

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