An electric car ETF is coming to the ASX: Here's what we know

Ever wanted to put some money on where the motor vehicle industry is headed? A ready-made diversified solution is about to list.

| More on:
A woman smiles as she powers up her electric car using a fast charger.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

There is increasing acceptance that electric cars will replace combustion engine vehicles in the coming years.

For those wanting to invest in this trend but feeling nervous about picking individual stocks, a new exchange-traded fund (ETF) is coming that might do the heavy lifting.

BetaShares revealed recently that BetaShares Electric Vehicles and Future Mobility ETF (ASX: DRIV) would be "coming soon".

"Sales of electric vehicles are projected to grow strongly in coming years," stated BetaShares.

"The transition to smarter vehicles is likely to significantly increase the use of semiconductors and high-tech componentry in cars."

Which shares will this ETF hold?

While details, including launch date, are currently scarce, the fund manager did provide 4 examples of shares that the new ETF would hold:

  • Tesla Inc (NASDAQ: TSLA): arguably the most famous electric vehicle stock, which has risen more than 1,000% since the start of 2020
  • Nio Inc (NYSE: NIO): one of several Chinese car makers focusing purely on electric engines
  • Aptiv PLC (NYSE: APTV): a US auto parts provider headquartered in Ireland, which has a large business making electronic active safety technologies
  • Uber Technologies Inc (NYSE: UBER): best known for its dominance in ride-sharing.

All up, the Electric Vehicles and Future Mobility ETF will hold up to 50 different stocks involved in the future of transportation. 

According to BetaShares, the convenience of investing in foreign businesses through ASX shares is not the only advantage of the new fund.

"DRIV offers potential portfolio diversification benefits to Australian investors, given that automotive technology is under-represented in the Australian market."

Thematic ETFs are so hot right now

The new ASX listing is the latest in a series of thematic ETFs to come to the market this year.

Just last month, BetaShares itself listed ASX's first cryptocurrency-related ETF, while this month ETF Securities revealed it would debut the first-ever Australian funds directly investing in Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH).

ETFs have become popular in recent years on the back of the success of passive index funds.

But Nucleus Wealth spokesperson Jayden Stent warned last month there were considerable risks with theme-based ETFs.

"You don't want to be lulled into thinking that because some ETFs offer low volatility that all ETFs are the same," he said on a Nucleus blog.

"The potential for large swings will mainly depend on the type of the fund… Investors [need] to take note of what the ETF is tracking and what are the underlying risks associated with it."

Motley Fool contributor Tony Yoo owns Bitcoin, Ethereum, and NIO Inc. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ETFs

The letters ETF sit in orange on top of a chart with a magnifying glass held over the top of it
ETFs

3 of the best ASX ETFs to buy in December

Here are three funds to consider adding to your portfolio next month.

Read more »

Man holding a calculator with Australian dollar notes, symbolising dividends.
ETFs

If I'd invested $5,000 in this ASX S&P 500 Index Fund 5 years ago, here's how much I'd have now

Would it have been a good idea to buy this ETF? Let's find out.

Read more »

Happy young woman saving money in a piggy bank.
ETFs

Did you know these ASX stocks are in the Vanguard Australian Shares Index ETF (VAS)?

The VAS ETF is an index fund that tracks the 300 biggest listed companies by market capitalisation.

Read more »

Man holding out Australian dollar notes, symbolising dividends.
ETFs

5 excellent ASX ETFs for a $500 investment next month

If you have $500 available to invest in the share market, then the exchange traded funds (ETFs) in this article…

Read more »

The letters ETF with a man pointing at it.
ETFs

IOZ vs VAS: Which is the better ASX Australian shares ETF to buy right now?

These funds are both popular options. Which is better?

Read more »

a man wearing casual clothes fans a selection of Australian banknotes over his chin with an excited, widemouthed expression on his face.
ETFs

Buy these ASX ETFs for passive income in 2025

These ETFs could be used to generate passive income next year.

Read more »

a man with a wide, eager smile on his face holds up three fingers.
ETFs

3 ASX ETFs to buy and hold for 10 years

Looking to make long term investments? Then check out these ETFs.

Read more »

ETF spelt out with a rising green arrow.
ETFs

Invest $5,000 into these ASX ETFs this week

These ETFs could be great options for investors with money to put into the market.

Read more »