Tesla might have the market share when it comes to the U.S., but other companies around the globe are emerging to become a global powerhouse in the electric vehicle space. One of those companies, Nio, is helping to spur demand for electric vehicles in China, which bodes well for certain exchange-traded funds (ETFs).
“Shares of Nio jumped 22.57% on Wednesday after JPMorgan upgraded the company to an overweight rating based on surging demand for electric vehicles in China,” a CNBC article noted. “The firm also introduced a new June 2021 $40 price target on the stock, which implies an 85% rally from Tuesday’s closing price of $21.62. The prior target was $14.”
“With Wednesday’s pop Nio has surged more than 500% this year amid broad enthusiasm for the electric vehicle space,” the article added. “JPMorgan acknowledged that it missed out on the company’s eye-popping rally, but the frim doesn’t believe it’s too late to get into the name. Citi also upgraded Nio to a buy rating on Wednesday, based on a strong order backlog as well as the company’s growing market share. The firm lifted its target to $33.20 from $18.10.”
To capitalize on this trend, ETFs to watch include the Global X Autonomous & Electric Vehicles ETF (NYSEArca: DRIV). 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.
- High Growth Potential: DRIV enables investors to access high growth potential through companies critical to the development of autonomous and electric vehicles – a potentially transformative economic innovation.
- Unconstrained Approach: DRIV’s composition transcends the classic sector, industry, and geographic classifications by tracking an emerging technological theme.
- ETF Efficiency: In a single trade, DRIV delivers access to dozens of companies with high exposure to the autonomous and electric vehicles theme.
Another way to play electric vehicles is via lithium that is used for batteries that power the cars themselves. As such, ETF investors may want to check out the Global X Lithium & Battery Tech ETF (NYSEArca: LIT), which seeks to provide investment results that correspond generally to the price and yield performance of the Solactive Global Lithium Index.
The fund invests at least 80% of its total assets in the securities of the underlying index and in American Depositary Receipts (“ADRs”) and Global Depositary Receipts (“GDRs”) based on the securities in the underlying index. The underlying index is designed to measure broad-based equity market performance of global companies involved in the lithium industry.
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