Top 8 EV ETFs To Invest In 2024

Key takeaways

What is an Electric Vehicles ETF?

An Electric Vehicles ETF is an exchange-traded fund that offers investors exposure to companies involved in the sustainable auto industry. These ETFs focus on companies that manufacture electric vehicles (EVs) and related components, and hold stocks of companies that are involved in the production of EV components. ETFs may also include investments in companies that are researching and developing technologies related to electric vehicles, such as batteries and charging infrastructure.

Investing in an EV ETF (usually through ETF brokers) gives investors access to a basket of stocks that are focused on the sustainable auto industry, while also providing diversification by investing in different companies and sectors. EV ETFs can also provide investors with the opportunity to benefit from the long-term ETF investing due to the growth potential of the sustainable auto industry, as more countries and consumers transition to electric vehicles.

Top 8 EV ETFs to invest in right now

All of these ETFs focus on investments in companies that are involved in electric vehicles, EV charging, and environmental, social, and governance (ESG) initiatives.

You also can be interested in information about the best eco friendly socks to invest.

Each ETF has its own unique features. Let’s explore each of those ETFs in more detail.

Do ETFs Pay Dividends?

The Global X Autonomous & Electric Vehicles ETF (DRIV) invests in companies involved in the development of autonomous vehicle technology, electric vehicles (EVs), and EV components and materials.

This includes companies involved in the development of autonomous vehicle software and hardware, as well as companies that produce EVs, EV components such as lithium batteries, and critical EV materials such as lithium and cobalt.

The Global X Autonomous & Electric Vehicles ETF has a management fee of 0.68% and assets under management of $760.14M

First Trust NASDAQ Clean Edge Green Energy Index Fund

The First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN) invests in companies involved in the clean energy sector, including renewable energy, energy efficiency, and advanced transportation.

QCLN has a management fee of 0.58% and assets under management of $1.395B

iShares Global Clean Energy ETF

The iShares Global Clean Energy ETF (ICLN) invests in global equities in the clean energy sector, including companies involved in solar, wind, and other renewable energy sources.

ICLN has a management fee of 0.41% and assets under management of $2.92B

Invesco WilderHill Clean Energy ETF

The Invesco WilderHill Clean Energy ETF (PBW) invests in companies involved in the advancement of cleaner energy and conservation. This includes companies involved in the production of alternative energy, such as solar and wind power, as well as companies that produce EVs and EV components such as lithium batteries.

PBW has a management fee of 0.62% and assets under management of $2.68B

KraneShares Electric Vehicles & Future Mobility ETF

The KraneShares Electric Vehicles & Future Mobility ETF (KARS) invests in companies engaged in the production of electric vehicles and/or their components, autonomous driving, shared mobility, lithium and/or copper production, lithium-ion/lead acid batteries, hydrogen fuel cell manufacturing, and electric infrastructure businesses.

KARS has a management fee of 0.70% and assets under management of $1.08B

SPDR S&P Kensho Clean Power ETF

The SPDR S&P Kensho Clean Power ETF (CNRG) invests in companies whose products and services are driving innovation behind clean power. This includes companies involved in the production of alternative energy, such as solar and wind power, as well as companies that produce EVs and EV components such as lithium batteries.

CNRG has a management fee of 0.45% and assets under management of $1.16B

VanEck Vectors Low Carbon Energy ETF

The VanEck Vectors Low Carbon Energy ETF (SMOG) invests in companies involved in the low carbon energy sector, including renewable energy, energy efficiency, and advanced transportation. SMOG has a management fee of 0.61% and assets under management of $172.06M

The fund's index tracks the performance of low carbon energy companies and the technologies that support these sources.

The index is a rules-based index intended to track the overall performance of renewable energy companies which may include, but is not limited to: wind, solar, hydro, hydrogen, bio-fuel or geothermal technology, lithium-ion batteries, electric vehicles and related equipment, waste-to-energy production, smart grid technologies, or building or industrial materials that reduce carbon emissions or energy consumption

Global X Lithium & Battery Tech ETF

The Global X Lithium & Battery Tech ETF (LIT) invests in global companies involved in the lithium industry, including companies involved in mining, refining, and producing lithium-ion batteries. LIT has a management fee of 0.75% and assets under management of $5.9B.

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

How to choose a sustainable automobile industry ETF?

When selecting a sustainable automobile industry ETF to invest in for 2023, there are several key criteria to consider. These criteria should be weighed carefully before making any decisions:

It is also important to consider the sustainability characteristics of the ETF. Many ETFs that invest in electric vehicles (EVs) have strong environmental, social, and governance (ESG) ratings, such as the MSCI ESG rating. Comparing and contrasting these ratings can help investors assess the sustainability aspects of different ETFs.

Additionally, assessing the fund's expenses is essential. High expenses can eat into the returns, so it is important to review the fund's expense ratio and any additional costs associated with the ETF.

Lastly, investors should review the fund's investment strategy and determine if it aligns with their goals. Understanding the fund's approach, such as active management or passive indexing, can help investors make an informed decision.

Is it a good idea to buy EV ETFs now?

Investing in electric vehicles (EV) ETFs now can be a lucrative option for those looking to get in on the ground floor of the electric vehicle revolution. ETFs provide a diversified portfolio of stocks and bonds related to the electric car industry, which can be beneficial for those seeking to spread risk and smooth out volatility. Additionally, ETFs can be traded on major stock exchanges, providing easy access to the data needed to make informed decisions about investments in an electric cars ETF.

The advantages of investing in EV ETFs include lower fees and expenses than owning an individual EV ETF stock, as well as diversification, which helps to reduce the risk of losses. Furthermore, ETFs can be bought and sold quickly and easily, allowing investors to react quickly to changing market conditions.

However, while ETFs can be a great way to access the electric car industry, there are some potential disadvantages. For instance, the value of an ETF is affected by general market factors, rather than the performance of individual stocks. Additionally, ETFs tend to be more expensive than mutual funds.

Investors should take into account that many EV producers are startups that have not yet turned profitable, making them potentially risky investments. Consequently, such funds also carry an elevated level of risk compared to traditional index ETFs.

Are EV ETFs stocks investments profitable?

Considering the potential advantages that come with their investors' diversification, low fees, and easy access to data, EV ETFs can be a profitable stock investment for those looking to capitalize on the electric vehicle revolution. Over the past five to ten years, EV ETFs have typically had returns in the range of 10-30%, with some seeing even higher returns. Read also: Top EV Battery Stocks to Invest in the TU article.

For example, the Global X Autonomous & Electric Vehicles ETF (DRIV) had a 5-year return of 11.39% as of September 22, 2023. The iShares Global Clean Energy ETF (ICLN) had a 5-year return of 12.54% as of September 30, 2023.

It’s important to note that EV ETFs can also yield losses, especially in the short term. For instance, the KraneShares Electric Vehicles & Future Mobility Index ETF (KARS) had a 1-year change of -10.07% as of October 13, 2023.

However, past performance is not a guarantee of future results, and it is important to consider your investment goals and risk tolerance before investing in any ETF.

The performance of EV ETFs can be affected by a variety of factors, such as the performance of the underlying stocks, the investment strategy of the fund, and market conditions. Investors should also be aware that EV ETFs can be subject to additional risks due to their focus on electric vehicle stocks. These risks include volatility, liquidity, and the potential for sudden drops in value.

Best brokers to invest ETFs

RoboForex

RoboForex Review

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The minimum deposit on all accounts except R StockTrader is $10. The minimum deposit for trading stocks on the R StocksTrader and copying trades on the CopyFx platform is $100. The spread on Prime and ECN accounts is floating, from 0 pips, on Pro and ProCent accounts – floating from 1.3 pips. You can trade 36 currency pairs, metals and CFDs on this type of account.

For trading, RoboForex has available the following applications: MetaTrader 4, MetaTrader 5, CTrader, and R StocksTrader, as well as its web terminal, on which you can work on real and demo accounts.

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eToro

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eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. Don’t invest unless you’re prepared to lose all the money you invest.

You can use eToro to invest in more than 3,000 stock assets, including at zero fee. The minimum deposit and leverage vary depending on the country of registration of a trader. Trading is available in mobile apps and on the web platform on any device. You can deposit and withdraw money via debit/credit cards, bank transfer and electronic payment systems. The broker offers margin trading, various bonuses and partner rewards.

DEGIRO

DEGIRO Review

DEGIRO is a convenient broker for Europeans. There is no minimum deposit amount, that is why demo accounts have been canceled because even small amounts can be invested. Also, the company doesn’t charge commissions for the lack of activity on the account and its maintenance. An investment account can be opened within 1 day. DEGIRO offers convenient replenishment and withdrawal. The base currency is always the currency of the client's country of residence.