The global adoption of the electric vehicle (EV) was evident in sales numbers for 2022. According to a Wall Street Journal article, they made up 10% of all new cars sold worldwide last year, which bodes well for EV-focused exchange traded funds.
A closer look at the sales numbers shows that this was a profound increase from 2021, jumping 68% higher in 2022. Additionally, the jump in sales came after a year fraught with economic headwinds such as rising global inflation as well as recession fears.
“Electric-vehicle sales crossed a global milestone last year, achieving around 10% market share for the first time, driven mainly by strong growth in China and Europe, according to fresh data and estimates,” WSJ reported.
“While EVs still make up a fraction of car sales in the U.S., their share of the total market is becoming substantial in Europe and China, and they are increasingly influencing the fortunes of the car market there as the technology goes mainstream,” the article added. “The surge in EV sales also contrasted with the broader car market that suffered from economic worries, inflation, and production disruptions.”
In terms of EV ETFs, they still offer value for investors looking for growth in the long term. Additionally, rising sales figures in the short term can appeal to traders looking to capitalize on the uptrend.
Trade the EV Trend
Launched last year, one ETF to consider, especially for traders looking to maximize their gains with added leverage, is the Direxion Daily Electric and Autonomous Vehicles Bull 2X Shares (EVAV). The fund seeks to achieve 200% of the daily performance of the Indxx US Electric and Autonomous Vehicles Index.
The index provides exposure to 25 U.S.-listed companies poised to disrupt the existing transportation market by bringing new and cleaner modes of transportation, such as electric and autonomous vehicles. It includes companies beyond vehicle manufacturers to paint a more holistic picture of the industry. The index includes charging station manufacturers such as ChargePoint and Blink, companies involved in software development and the manufacturing of various electrical components, and electric vehicle manufacturers such as Tesla, Lucid, and NIO.
“The path to long-term acceptance and widespread adoption of electric and autonomous vehicles is brighter than ever before,” said Direxion managing director and head of product Dave Mazza in a news release. “EVAV allows traders to take an amplified bullish position on electric and autonomous vehicles, along with the infrastructure to support them.”
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