For consumers who think electrical vehicles are out of reach due to their high prices, that could be changing soon. Companies like Tesla are looking to introduce entry level models to make them more financially accessible to consumers, which could help spur demand and boost certain exchange-traded funds (ETFs).

Additionally, there are other manufacturers looking to offer cheaper alternatives.

“The Tesla Model 3 is the hottest EV in the world. But there are plenty of cheaper alternatives,” a Forbes article noted. “That includes used EVs and a dirt-cheap electric made by a GM joint venture. According to data from Cox Automotive, the average price of electric cars was $55,600 in 2019 down from $64,300 in 2018. Still out of reach for most Americans but headed in the right direction.”

The key to manufacturing cheaper electrical vehicles lies in battery technology, the article explained.

“The key to cheaper EVs is battery tech. Elon Musk recently announced his goal of a $25,000 Tesla in three years. That could happen if battery prices fall below $100/kilowatt hour = cheaper battery packs = cheaper EVs,” the article said.

^SPKEV Chart

^SPKEV data by YCharts

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.

DRIV provides:

  • 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.

For more market trends, visit  ETF Trends.