Molly Ayala
Electric vehicles (EVs) have existed since 1828, but they have only recently become commonplace. This shift has been facilitated by government policies, such as the planned ban on the sale of new petrol and diesel vehicles, and the proposal for all new homes to be built with EV charging points. The affordability of EVs has also improved, with the cost of an electric vehicle expected to fall enough to equal the cost of a gas-powered car in 2022. The rise in popularity of EVs has led to a demand for public charging points, creating a commercial opportunity for businesses. This has resulted in a range of investment opportunities, from EV stocks to funds with exposure to EVs and related technologies.
| Characteristics | Values |
|---|---|
| Date of existence | 1828 |
| Recent popularity | Government policies, affordability, and climate change awareness |
| Global sales | 1 million in 2017, 2 million in 2018, expected to increase to 4 million by 2020 and 21 million by 2030 |
| Share of automotive market | 2% currently, expected to reach 10% by 2024 |
| Top markets | China, Europe, and the U.S. |
| Leading companies | Tesla, Nio, General Motors, XPeng Motors, Facedrive, Steer, Plug Power, Albemarle, and BorgWarner |
| Investment opportunities | EV companies, funds with exposure to EVs, and companies providing EV charging infrastructure |
| Charging infrastructure | Public charging stations, residential charging, and workplace charging |
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What You'll Learn
Electric vehicle stocks
Electric vehicles (EVs) have existed since 1828, but they have only recently become commonplace, thanks in part to government policies and initiatives. The global sales outlook for EVs is promising, with sales expected to increase to 4 million by 2020 and 21 million by 2030, according to a Deloitte report. As a result, investors are increasingly considering EV stocks as a potentially lucrative addition to their investment portfolios.
When it comes to investing in EV stocks, there are several options to choose from. These include stocks of electric vehicle manufacturers, electric battery producers, and companies that make charging stations and electric motors. In a broader sense, EV stocks can also include mining companies and semiconductor companies that produce key EV components.
One well-known EV stock is Tesla (NASDAQ: TSLA), which has been a leader in the EV space. However, Tesla stock has experienced volatility, with a significant drop in 2025 following a strong run after the US election in November 2024. Another option is Rivian Automotive (NASDAQ: RIVN), which is still in its early stages and has seen its stock drop 16% year-to-date as it continues to incur high expenses.
Other EV stocks to consider include XPeng Inc. (NYSE: XPEV), a Chinese EV company that has seen success with its stylish vehicles, and Facedrive (FD.V, FDVRF), a Canadian tech company with an ambitious ride-hailing platform and plans for expansion into the US market. Plug Power (PLUG) is another speculative play, based on the expected growth of the hydrogen fuel cell industry, but it is a highly volatile stock.
For those who want exposure to the EV sector but prefer not to pick individual stocks, EV exchange-traded funds (ETFs) like the Global X Autonomous & Electric Vehicles ETF (DRIV) offer a way to invest in a basket of stocks related to electric vehicles and their technology. These funds typically hold stocks of companies involved in EV manufacturing, as well as those producing EV technology such as charging stations and batteries.
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Electric vehicle charging infrastructure
Electric vehicle (EV) charging infrastructure is essential to support the growing number of EVs on the road and encourage further adoption. As of February 2024, there were over 61,000 publicly accessible EV charging stations in the United States, with the majority of EV charging taking place at home. However, as EV ownership expands to those without access to home charging, such as residents of multi-family buildings or on-street parking, the need for a robust and equitable network of public charging stations becomes more critical.
The Alternative Fuels Data Center and the Station Locator have defined "station location" as a physical place with one or more EV charging ports, such as a parking garage or lot. An EV charging port, also called a charger, provides power to a single vehicle at a time, even if it has multiple connectors. These charging ports are sometimes referred to as electric vehicle supply equipment or charging posts.
The Combined Charging System (CCS), or SAE J1772 combo, is a charge port that can accept Level 1, Level 2, or DC fast charging. Level 1 charging is the slowest and simplest method, using a standard household electrical outlet. Level 2 and DC fast charging are faster options, with DC fast charging enabling rapid charging at power outputs up to 500 kW. As of 2023, more than 20% of public EV charging ports in the US offered DC fast charging, and this number is expected to increase due to federal funding and the adoption of medium- and heavy-duty EVs.
To support the mass adoption of EVs, collaboration between government, businesses, and other stakeholders is necessary. Several laws, including the 2021 Infrastructure Investment and Jobs Act and the 2022 Inflation Reduction Act, have aimed to encourage the development of EV infrastructure. Additionally, advancements in battery technology and cost reductions have made EVs more affordable and attractive to consumers.
Despite progress, challenges remain. "Range anxiety," or the concern about the limited range of EVs on a single charge, is a significant barrier for consumers. Furthermore, long wait times at charging stations can create bottlenecks and frustration. To address these issues, continued expansion and improvement of EV charging infrastructure are needed, ensuring easy and equitable access for all drivers.
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Government policies and subsidies
One of the most common government policies to promote EVs is offering subsidies and tax credits to consumers. For example, the US federal government offers tax credits of up to $7,500 for purchasing EVs, which has been credited for the rapid increase in EV sales over the past decade. Similarly, China has provided subsidies of up to US$9,800 for purchasing all-electric passenger vehicles and up to US$81,600 for electric buses. These subsidies, along with new incentives in 2014, resulted in a 328% increase in new energy vehicle production in China during that period. Other countries like Japan, India, and New Zealand have also introduced subsidies and tax exemptions to encourage the adoption of EVs.
In addition to consumer subsidies, governments have also provided subsidies and grants to manufacturers and retailers to promote EV production and infrastructure development. For instance, China has offered direct subsidies to bolster the zero-emission heavy-duty vehicle (HDV) market, initially targeting public buses and municipally-owned vocational trucks. The US Department of Transportation also offers funding programs, such as the National Electric Vehicle Infrastructure (NEVI) Formula Program and the Discretionary Grant Program for Charging and Fueling Infrastructure, to support the deployment of EV charging stations.
While government support has been instrumental in boosting the EV industry, there have also been concerns about the sustainability of this growth if such support were to be withdrawn. For example, under the Trump administration, there were plans to scrap EV tax credits and reduce funding for charging stations, which experts predicted would slow EV sales and trigger factory shutdowns. Similarly, the potential removal of federal EV policies in China beyond 2023 could impact the country's EV market, although the Chinese government has expressed clear commitments to continue promoting EVs.
Overall, government policies and subsidies have been essential in driving the adoption of EVs worldwide. By providing financial incentives to consumers and manufacturers, governments have accelerated the shift towards more sustainable transportation options and contributed to reducing greenhouse gas emissions. However, the long-term viability of these policies and their potential impacts on the EV industry remain a subject of ongoing discussion and analysis.
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Electric vehicle companies
Electric vehicles (EVs) have existed since 1828, but they have only recently become commonplace. This is due to a variety of factors, including government policies, improvements in battery technology, and the increasing affordability of EVs.
The EV market is expected to be worth over $1 trillion in 2029, and there are many companies looking to capitalize on this. One of the leading electric car manufacturers is Tesla, which was one of the first companies to perfect EV design. Other companies include VinFast, which prioritizes premium craftsmanship and high-quality parts; Rivian, which offers three SUVs and a pickup truck made from 100% animal-free materials; and XPeng Motors, a Chinese company that has seen success in the EV market with its stylish vehicles.
There are also companies that are not solely focused on manufacturing EVs but are still looking to benefit from the EV boom. For example, Albemarle is a leading producer of low-cost lithium, a key component in EV batteries. Similarly, BorgWarner benefits from making parts for gas-powered engines and is now seeing emerging revenue streams from electric vehicle components.
There are also companies that are not directly involved in the production of EVs but are looking to revolutionize the industry. For instance, Facedrive is a Canadian company that has acquired Steer, an electric vehicle subscription company that plans to revolutionize the transportation industry.
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Electric vehicle parts
Electric vehicles (EVs) have existed since 1828, but their prevalence in society has been limited until very recently. The electrification of transportation is a trend that is here to stay, and it is creating long-term growth opportunities for investors.
The basic main elements of electric cars are the battery, inverter, controller, and motor. The battery functions as an electrical energy storage system in the form of direct-current electricity (DC). The inverter changes the direct current (DC) on the battery into an alternating current (AC) that is then used by the motor. The controller regulates the electrical energy from the battery and inverter, which is then distributed to the motor. The motor converts electrical energy into mechanical energy, rotating the transmission and turning the wheels.
In addition to these core components, there are several other parts that make up an electric vehicle. These include:
- A charge port, which allows the vehicle to connect to an external power supply to charge the battery pack.
- A DC/DC converter, which converts higher-voltage DC power from the battery pack to the lower-voltage DC power needed to run vehicle accessories and recharge the auxiliary battery.
- A thermal system for cooling, which maintains the proper operating temperature of the engine, motor, and other components.
- A power electronics controller, which manages the flow of electrical energy from the battery and controls the speed and torque of the motor.
- A transmission, which transfers mechanical power from the motor to the wheels.
The demand for electric vehicles is expected to grow rapidly, with ownership projected to reach 125 million by 2030. This presents a significant opportunity for investors, particularly in companies that produce electric vehicle parts.
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Frequently asked questions
An electric vehicle (EV) is a car that is powered by electricity rather than gasoline or diesel.
Electric vehicles are becoming more popular due to government policies encouraging the use of greener vehicles, improvements in battery technology, and the increasing affordability of electric cars.
There are several ways to invest in electric vehicles. You can invest in stocks and shares of companies that produce electric vehicles, such as Tesla, General Motors, or Nio. Alternatively, you can invest in funds that have exposure to electric vehicles and related technologies, such as the Baillie Gifford Global Discovery Fund or the Artemis Global Income Fund.
Companies can capitalize on the shift to electric vehicles by providing public charge points, either at prime locations where they can charge a premium or at locations where customers dwell for long periods, such as coffee shops at motorway service stations. Utilities, technology companies, and vehicle manufacturers are also well-positioned to enter the space by leveraging their existing capabilities and developing partnerships.
One challenge for electric vehicles is the need for cheaper, lighter, and more powerful batteries to make them more cost-effective. However, this also presents an opportunity for companies to profit from the increase in electric charging infrastructure. Additionally, electric vehicles offer improved efficiency, better performance, and lower maintenance costs compared to traditional gasoline or diesel vehicles.
