Investors interested in electric vehicles have several options. Tesla Motors, for example, focuses solely on the production of electric vehicles and can be directly invested in by purchasing stock. Companies in the automotive sector that manufacture vehicle parts or provide raw materials used in the production of electric vehicles are another way to gain portfolio exposure to electric vehicles. Investing in exchange-traded funds (ETFs) with holdings in securities related to electric vehicle production or electric vehicle parts is another slightly less risky option.
Some major automakers, such as Toyota, are heavily investing in electric vehicles and offer investors the option of investing in both traditional and electric vehicles. Chevrolet and Nissan have also released notable electric vehicle models in the United States. Investors should carefully consider available investment opportunities and weigh the potential risk-return tradeoffs provided by electric vehicles and the automotive industry.
Many automakers also create auto parts for both traditional and electric vehicles. Polypore International (PPO) manufactures both lead-acid and lithium-ion batteries for use in conventional and electric vehicles. This stock allows investors to invest in the general production of vehicle batteries. More batteries will be required as the use of electric vehicles and conventional vehicles grow, and this company will most likely benefit from increased global car demand.
Plug Power (PLUG) is another battery company that produces hydrogen fuel cell batteries that are used in electric vehicles and a variety of other electronic devices. These batteries could be used to replace lead-acid batteries in forklifts. Plug Power batteries are also used in industries other than the automotive industry, providing the company with a large market.
Chile's Sociedad Quimica y Minera (SQM) is a major supplier of lithium, which is used in many batteries that power electric vehicles and other clean technologies. Portfolio exposure to electric vehicles is provided by investments in companies such as Polypore International, Plug Power, and SQM, while diverse holdings outside the automotive industry are maintained.
Exchange-Traded Funds for Electric Vehicles
Investors may also be interested in ETFs that track EVs. These funds enable investors to purchase shares in funds that track the development of the electric vehicle industry. Investments are spread across multiple companies, reducing investment risk and providing returns comparable to the sector's average.
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