10 Electric Vehicle ETFs To Buy in 2022 (EV ETF Review)

Electric vehicle sales are surging driven by regulation, climate awareness, new models, and dropping costs. Tesla is now one of the most valuable companies in the world, with a market capitalization of nearly $1 trillion. As the transition to EVs continues, learn how you can invest in the future of transportation through EV ETFs.

SustainFi   Updated February 8th, 2022

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Why invest in electric vehicles?

According to the BNEF Electric Vehicle Outlook, transport accounts for 14 percent of global greenhouse gas emissions. Reducing carbon emissions from transportation by replacing combustion engines with batteries is critical to achieving the Paris Agreement goal of limiting global warming to two degrees by the end of the century.

Fifteen countries and 31 cities or regions have already banned the sales of new internal combustion engine (ICE) vehicles, mostly between 2030 and 2060. Norway was the first to make all new passenger cars emission-free starting in 2025. The U.K., Japan, and California won’t allow any new ICE sales from 2035; France and Canada have a 2040 goal.

China, the largest market for EVs, eventually aims to ban all diesel and petrol cars. Beijing said that by 2035 50% of car sales should be “new energy vehicles” (NEVs), including hybrids, battery and fuel cell-powered cars. China even makes it easier for NEV owners to get license plates, which are limited in some cities to deal with traffic congestion and air pollution.

Besides government regulation, annual EV sales are projected to explode because EVs are getting better and appealing even to buyers who aren’t climate-aware. Besides being emission-free, EVs do not need maintenance like oil changes, are not subject to increasingly onerous air quality or noise regulation, accelerate faster, and have fewer parts.

Although initially EV adoption was slow due to short ranges and the time it takes to charge, both ranges and charging times are improving. The median range for EVs has risen from around 70 miles in 2011 to 260 miles in 2020. And, given that most people in the U.S. live in single-family homes, garage charging is relatively painless once the plug is installed.

The charging station network continues to be a problem. The number of charging stations in the U.S. is less than half the number of gas stations, and plugs differ between operators. But the network is growing rapidly, and the Biden administration sees the EV charging network as an important part of its climate agenda. Tesla’s network is already pretty solid.

Also, until recently, there weren’t enough electric cars to appeal to buyers. But, with a wave of new EV models hitting the market, that is changing, too. Even Ford’s iconic F-150 pick-up truck is going electric, appealing to a different group of customers than Tesla. Even legacy car companies are staking their future on EVs. Ford and GM are investing $30 and $35 billion in EVs respectively by 2025. And the Jaguar brand is going fully electric, also by 2025.

According to UBS Research, electric cars should account for 40% of all cars made globally by 2030, up from 4% today. And BNEF’s Electric Vehicle Outlook suggests that for transport emissions to reach net-zero by 2050, 60% of new vehicle sales must be zero-carbon as soon as 2030. That may not be crazy: in early adopter countries like Norway, three-quarters of new car sales were already electric in 2020, according to the IEA.

What funds invest in electric cars?

There are ten funds that invest in electric cars:

  • Global X Autonomous & Electric Vehicles ETF (DRIV)
  • iShares Self-Driving EV and Tech ETF (IDRV)
  • KraneShares Electric Vehicles and Future Mobility Index ETF (KARS)
  • SPDR S&P Kensho Smart Mobility ETF (HAIL)
  • Fidelity Electric Vehicles and Future Transport ETF (FDRV)
  • SmartETFs Smart Transportation & Technology ETF (MOTO)
  • Capital Link Global Green Energy Transport and Technology Leaders ETF (EKAR)
  • Simplify Volt RoboCar Disruption and Tech ETF (VCAR)
  • Global X Lithium & Battery Tech ETF (LIT)
  • Amplify Lithium & Battery Technology ETF (BATT)

🔔 Looking for other ways to invest in climate change solutions? Consider green bonds and carbon credit funds.

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The best electric vehicle ETFs

If you’ve decided to invest in EVs but don’t want to research individual stocks or just want a diversified basket of companies, you have ten funds available to you.

Fund / TickerExpense RatioAssets ($m)2021 PerformanceHoldingsRegions% in Tesla
Global X Autonomous & Electric Vehicles ETF (DRIV)0.68%$1,31027.8%76U.S. (70%), Japan, Hong Kong3%
iShares Self-Driving EV and Tech ETF (IDRV)0.47%$60827.3%122U.S. (55%), Germany, Japan4%
KraneShares Electric Vehicles and Future Mobility Index ETF (KARS)0.70%$31724.0%70China (30%), U.S. (36%)5%
SPDR S&P Kensho Smart Mobility ETF (HAIL)
0.45%$1285.6%85U.S. (80%), Hong Kong, Japan2%
Fidelity Electric Vehicles and Future Transport ETF (FDRV)0.39%$42-50U.S. (65%), Korea, Hong Kong, France5%
SmartETFs Smart Transportation & Technology ETF (MOTO)0.68%$1517.1%36U.S. (56%), Germany, South Korea5%
Capital Link Global Green Energy Transport and Technology Leaders ETF (EKAR)0.95%$1116.9%69U.S., Japan, Hong Kong1%
Simplify Volt RoboCar Disruption and Tech ETF (VCAR)0.95%$818.4%20U.S. (75%), Brazil, Taiwan9%
Global X Lithium & Battery Tech ETF (LIT)0.75%$4,99036.7%42China (44%), U.S.6%
Amplify Lithium & Battery Technology ETF (BATT)0.59%$22716.8%84China (30%), U.S., Australia6%

Learn more about each fund.

Global X Autonomous & Electric Vehicles ETF (DRIV)

  • Expense ratio: 0.68%
  • Best for: investing in big tech and autonomous vehicle technology

One of the most popular EV ETFs, the Global X Autonomous & Electric Vehicles ETF (DRIV), is a diversified EV and autonomous vehicle fund. DRIV owns EV makers (such as Tesla), manufacturers of EV components and battery materials, large tech firms that have invested in self-driving technology (e.g., Alphabet, Microsoft, and Qualcomm), and legacy automakers that are investing in EVs (e.g., Toyota). Stocks are selected using artificial intelligence.

DRIV has over $1.3 billion in assets and charges 0.68% in expenses ($68 on a $10,000 investment each year). The top three holdings are Alphabet (3%), Apple (3%), and Toyota (3%). With around 70 holdings, the fund is relatively diversified, and any stock is capped at about 3%. DRIV invests in the U.S. (70% of assets), followed by Japan (8%), and Hong Kong (4%).

Tesla and Toyota aside, the top ten holdings feature a lot of big tech stocks like Apple, Microsoft, and Alphabet. You would own these stocks if you bought any broad market ETF like the Vanguard S&P 500 ETF (VOO), which costs only 0.03%. So we wonder if paying 0.68% in expenses is worth it.

All-in, with its big tech holdings, DRIV is more of an autonomous vehicle ETF than an EV-focused fund. Besides, autonomous vehicles are not the main business line for many big tech stocks in the top ten holdings, or even close to it. For example, Microsoft’s share price is not driven by any self-driving car technology.

iShares Self-Driving EV and Tech ETF (IDRV)

  • Expense ratio: 0.47%
  • Best for: investing in big tech and autonomous vehicle technology

Like DRIV, the iShares Self-Driving EV and Tech ETF (IDRV) is not quite an EV ETF. Instead, the fund invests in stocks of companies that make autonomous car technology, EVs, and batteries. The ETF tracks the NYSE FactSet Global Autonomous Driving and Electric Vehicle Index.

IDRV is a mid-sized EV fund with over $600 million in assets and around 120 holdings. Many holdings are big tech and computer chip manufacturers, not pure-play automakers. IDRV mostly invests in the U.S. (55%), followed by Germany and Japan. Compared to DRIV, IDRV is less concentrated in the top ten and invests more outside the U.S.

Although the top ten holdings include Tesla (4% of assets), Toyota (5%), Ford (4%), and GM (4%), the fund is dominated by technology companies like Nvidia, Alphabet, Apple, Qualcomm, Intel, and Samsung. Self-driving cars don’t drive the business model of many of these stocks, so we wonder if this fund is worth paying 0.47% for. At least it’s cheaper than DRIV, which costs 0.68%.

KraneShares Electric Vehicles & Future Mobility ETF (KARS)

  • Expense ratio: 0.70%
  • Best for: pure-play exposure to electric cars, China included

The KraneShares Electric Vehicles & Future Mobility ETF (KARS) tracks stocks involved in making electric cars (including Tesla, Nio, Ford, Xpeng), battery technology (like CATL), autonomous driving technology, lithium and copper mining, and hydrogen fuel cells.

Unlike most EV funds that are heavy on big tech and semiconductor stocks, KARS does hold a lot of car manufacturers, though many of them are traditional carmakers investing in EVs. The top ten stocks include Ford, Tesla, GM, Mercedes-Benz, and BMW. Holdings are fairly diversified by region, too. China and U.S. are both around one-third of the fund. KraneShares, which launched this fund, is known for China ETFs (as well as carbon credit ETFs.)

The fund has over $300 million in assets and costs 0.70%.

Compared to the other ETFs on this list, KARS will give you the most exposure to Tesla and electric cars, but it is heavily invested in China. China is the biggest EV market, but it has been a volatile place for investors recently. Besides, the Chinese EV space is brutally competitive.

Having said that, we like that KARS invests in companies that actually make cars, as opposed to tech companies that may have an autonomous driving business on the side.

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Fees

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Fees

0.49%-0.89%

Minimum

$100,000

SPDR S&P Kensho Smart Mobility ETF (HAIL)

  • Expense ratio: 0.45%
  • Best for: exposure to smart transportation technology

Launched in late 2017, the SPDR S&P Kensho Smart Mobility ETF (HAIL) invests in an index of U.S.-listed stocks involved in autonomous vehicles, drones, and advanced transportation. To determine which stocks should be included, the index provider uses natural language processing (NLP) to scan company filings.

Like many ETFs on the list, HAIL is not a 100% EV ETF. But, due to the unorthodox stock selection process, the top holdings are different from other EV and autonomous car ETFs. Out of its 85 holdings, the top ten include Honda but also Uber and Lyft. (For some reason Honda is the only car manufacturer in the top ten.) Most of the fund is in the U.S. (80%), followed by Hong Kong and Japan.

HAIL has around $130 million in assets under management and costs 0.45%. It is more of a play on the future of transportation, including Transportation as a Service, not a focused bet on electric vehicles.

Fidelity Electric Vehicles and Future Transport ETF (FDRV)

  • Expense ratio: 0.39%
  • Best for: the cheapest EV ETF

A new launch from Fidelity, FDRV invests in EV and autonomous carmakers, related tech, and energy systems. Companies “engaged in other initiatives to change the future of transportation” are also welcome.

FDRV has 50 holdings, including the top three Uber, Tesla, and Qualcomm. It is more diversified than other funds – the top ten stocks are about one-third of its assets. And, though FDRV invests globally, two-thirds of its assets are in the U.S. FDRV is not the best way to get exposure to mainland China EVs, but it’s a reasonably diversified EV and autonomous car fund.

FDRV is also the cheapest fund on the list, with a 0.39% expense ratio.

SmartETFs Smart Transportation & Technology ETF (MOTO)

  • Expense ratio: 0.68%
  • Best for: actively managed smart transportation ETF

Launched in late 2019, the SmartETFs Smart Transportation & Technology ETF (MOTO) is an actively managed EV ETF. The fund focuses on global companies involved in “the advancement of transportation.” The SmartETFs team does independent fundamental research to select stocks. MOTO is not technically an EV fund, though many investments overlap with EV and autonomous vehicle ETFs.

MOTO aims to hold around 35 positions of equal weight. Although over 50% of the fund’s assets were in the U.S., it also had major investments in German and South Korean stocks.

In February 2022, MOTO held 36 stocks. Although the top ten included Tesla, the number one holding, many other stocks were big tech or semiconductor manufacturers like Nvidia, ON Semiconductor Corp, and Alphabet, or car component makers.

Despite being actively managed, MOTO returned only 17% in 2021, underperforming most funds on this list. MOTO has $15 million under management and costs 0.68%.

Capital Link Global Green Energy Transport and Technology Leaders ETF (EKAR)

  • Expense ratio: 0.95%

The Capital Link NextGen Vehicles & Technology ETF (EKAR) is a small fund with around $12 million in assets. It tracks an index of stocks involved in new energy or autonomously driven vehicles, including carmakers, battery manufacturers, suppliers, and semiconductor and software companies. Relevant stocks are identified using a natural language processing (NLP) algorithm to scan large volumes of data.

In February 2022, EKAR held around 70 stocks, mostly in the U.S., Japan, and Germany. The top ten included some unusual picks. Copper miner First Quantum Minerals and Sumitomo Metal Mining were the two top holdings.

With a 0.95% expense ratio, this tiny ETF is way too expensive to be on your radar.

Simplify Volt RoboCar Disruption and Tech ETF (VCAR)

  • Expense ratio: 0.95%
  • Best for: concentrated, leveraged exposure to Tesla and a few autonomous driving stocks

A small ETF for investors who like risk and Tesla, the Simplify Volt RoboCar Disruption and Tech ETF (VCAR) selects a small number of autonomous driving stocks. These are generally also EV-related stocks.

In practice, many investments are large tech companies that develop autonomous driving technology among other things. Apart from investing in only a few stocks – 20 in February 2022 – VCAR may also use options to increase leverage. Stocks are selected by Simplify ETF’s partner Volt Equity, using a proprietary process.

This fund costs 0.95%, returning 18.4% in 2021. The top holdings are Nvidia, Tesla, and TSMC.

Global X Lithium & Battery Tech ETF (LIT)

  • Expense ratio: 0.75%
  • Best for: exposure to lithium, a key component in electric car batteries

Batteries are the most expensive components of electric cars, accounting for 30% to 40% of the vehicle’s cost. Most electric cars run on lithium-ion batteries. Lithium – a silvery metal mined in Chile and Australia – is a key component in making lithium-ion batteries. So by betting on lithium, you can bet on electric cars.

Launched in 2010, the Global X Lithium & Battery Tech ETF (LIT) is the largest lithium and battery ETF. It tracks the Solative Global Lithium Index and invests in roughly 40 companies involved in lithium mining or battery production. LIT invests globally, and China is the largest region (44% of assets), followed by the U.S. (23%).

The fund’s holdings are very concentrated. Its top ten investments are over 50% of its assets and include lithium miners Albemarle and Ganfeng Lithium and battery manufacturers CATL, Panasonic, and BYD. Albemarle alone is 11% of LIT’s assets. LIT is market-cap weighted, meaning that the ETF assigns a higher percentage of assets to the largest companies.

The fund costs 0.75%. The ETF has been volatile in the past, though it had a great run in 2021.

Amplify Advanced Battery Metals & Materials ETF (BATT)

  • Expense ratio: 0.59%
  • Best for: exposure to lithium, a key component in electric car batteries

Launched in 2018, BATT invests in battery materials suppliers and battery manufacturers globally. Electric vehicle manufacturers are also included. The top three countries are China, the U.S., and Australia.

BATT has over 80 holdings, double that of LIT, and each investment is capped at 7% of the fund. As a result, the ETF is less concentrated than LIT. The top ten stocks include battery manufacturers CATL and BYD, Tesla, and green metal miners BHP Group, Glencore, and Norilsk Nikel. Mining company BHP Group is the largest investment at around 8% of the fund.

BATT has a 0.59% expense ratio.

Should you pick LIT or BATT? Although LIT has outperformed over the past year, BATT is cheaper, more diversified, and less invested in China, so it’s up to you.

💰 Which EV ETF is best?

  • KARS is the best ETF for exposure to electric cars. Many other EV ETFs invest a lot in large-cap tech stocks like Alphabet that are developing self-driving car technology. But self-driving cars are not material to Alphabet’s stock performance, so we would avoid overpaying for what look like large-cap tech funds.
  • LIT and BATT are both good ways of getting exposure to lithium. Learn more about investing in lithium and EV batteries

🔔 Looking for individual EV stocks? Check out this EV stock list.

The risks of EV ETFs

Investing in electric vehicles is not without risks.

Although EV adoption will grow, many new EV-makers have been struggling. Upstarts beyond Tesla remain unprofitable and have to deal with production challenges. Lordstown Motors (RIDE), Canoo (GOEV) and Nikola (NKLA) lost some of their management teams and faced fraud allegations. Despite all this, valuations remain sky-high. Some companies made lofty promises to investors, but can they deliver? It remains to be seen.

Besides, there are additional challenges:

  • Subsidies. EV buyers continue to rely on government subsidies in Europe, China, and the U.S. If these subsidies are reduced or go away completely, EV carmaker stocks may suffer in the short term. 
  • Competition. The EV market is relentlessly competitive, especially in China. Because EVs are simpler to design and manufacture than ICE models, both startups and traditional manufacturers are entering the fray. 
  • Rising battery costs. Lithium-ion battery pack prices fell by 89% from 2010 to 2020, but rising prices of battery metals like lithium are reversing this trend in 2022. This may be good for green metal stocks, but not so good for EV and battery makers. Luckily, some ETFs on the list invest in metals and mining companies, too.

NOT INVESTMENT ADVICE. The content is for informational purposes only; you should not construe any such information as investment advice.

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Frequently Asked Questions

What EV ETF has the most Tesla? 

Out of the ten EV ETFs, the Simplify Volt RoboCar Disruption and Tech ETF (VCAR) has the most invested in Tesla stock. Tesla is the number two holding and over 9% of the ETF’s assets as of February 2022.

Does Vanguard have an electric vehicle ETF?

No, Vanguard doesn’t have an EV ETF at this point.

Does Fidelity have an electric vehicle ETF?

Yes, Fidelity just launched the Fidelity Electric Vehicles and Future Transport ETF (FDRV).

Which EV ETF has the most NIO?

Fidelity Electric Vehicles and Future Transport ETF (FDRV) has the most Nio, which is about 3% of the fund.