The Global X Autonomous & Electric Vehicles ETF (NASDAQ: DRIV) is higher by 84% off its March lows and there are ample reasons to believe DRIV’s recent bullishness is the foundation for something longer-lasting and more substantive.
DRIV seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive Autonomous & Electric Vehicles Index.
DRIV enables investors to access high growth potential through companies critical to the development of autonomous and electric vehicles – a potentially transformative economic innovation and it features broad reach into the EV ecosystem.
Lithium-ion battery capacity is vital because one of the primary factors car buyers consider when evaluating electric vehicles is how long those vehicles can run on a single charge. Tesla’s dominance in the booming electric vehicle market will also move the demand for lithium.
Favorable Fundamentals for DRIV
The average electric vehicle stock is higher by 38% this month, topping the S&P 500 by a margin of better than 6-to-1.
Tesla is “The EV behemoth that has helped catalyze the rally in the entire sector. Jefferies analyst Philippe Houchois increased his Street-high price target to $2,500 Wednesday. And investors continue to be excited about Friday’s stock split, Tesla’s potential inclusion in the S&P 500, and its coming battery technology day scheduled for Sept. 22,” reports Al Root for Barron’s.
Furthermore, due to the increased concerns over environmental issues, global governments are supporting the development of electric vehicles worldwide. Consequently, the high voltage battery market will continue to enjoy increased interest and investments as electric vehicles is expected to drive the growth.
“On Wall Street, activity begets more activity. And there is a lot of capital market activity in the EV space lately. Li Auto recently went public. Several special purpose acquisition companies, or SPACs, have bought EV startups. Xpeng (XPEV) is expected to price its IPO Wednesday evening. Reports indicate pricing will exceed $13, the top end of its expected range. Investors want more EV exposure,” according to Barron’s.
DRIV, which is about two and a half years old, holds 75 stocks, none of which command weights north of 3.67%, confirming the fund is a broad-based play on EV investing.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.