Investing in the Electric Vehicle Ecosystem with KARS
Hi, my name is Anthony Sassine and I'm a Senior Investment Strategist at KraneShares. I'm focused on China and electric vehicles.
How is climate change creating investment opportunities?
Climate is one of the main reasons that is driving electrification in transportation and buildings. It's also driving innovation in energy storage. According to BNEF, we’re going to have to invest more than 200 trillion between today and 2040 in order to reach our climate goals. More than 50% of that investment is going to have to go to electrification of transportation and buildings. And also, it's going to have to go into energy storage, which means batteries. We're trying to replace 1.3 billion internal combustion engine (ICE) cars with electric vehicles. So you can imagine the massive demand that will be happening over the next 20-30 years in that space, and companies that are participating in the electric vehicle ecosystem will benefit tremendously.
How will the EV industry grow in the coming years?
We have seen impressive growth in electric vehicle sales over the past few years. Despite the impressive growth from selling 2.3 million cars in 2019 to an expected 14 million cars in 2023, we are still at the beginning stages. We believe mass adoption will happen when we hit ICE parity. What that means is when you go to a dealership, you will see the same car in an ICE train versus an electric vehicle train, but the electric vehicle is going to be cheaper, faster, and actually cooler. And that's exactly when we're going to hit mass adoption and witness a hockey stick type growth that could potentially extend into the next decade.
What does informed EV investment look like?
At KraneShares we work closely with Bloomberg New Energy Finance (BNEF) to define the EV ecosystem. If you invest only the Tesla's in NIOs, you're missing out on the whole industry that is participating in that transition and also missing out on very important companies that are not accessible by US investors. These companies include CATL, which is the globe and China's largest battery maker1 and BYD, which is China's largest EV maker and soon to be the globe's largest EV seller.2
Investing in the EV ecosystem with KraneShares
The KraneShares Electric Vehicle and Future Mobility ETF, ticker symbol KARS, provides investors with access to the EV ecosystem, including electric vehicles, EV components, the battery makers, the miners, the infrastructure builders like charging and hydrogen, and also the connectivity companies. KARS is a well-diversified global thematic portfolio it actually has very little overlap with S&P 500 and MSCI ACWI.
KARS is a great complement to any global equity portfolio that could provide investors with alpha opportunity and diversification benefits. To learn more about KARS and our Climate suite, please visit our website at www.kraneshares.com and subscribe to our research. Thank you for watching.
- Kang, Lei. "Global EV battery market share in 2022: CATL 37%, BYD 13.6%," CNEVPost. February 8, 2023.
- Lu, Marcus. "Visualizing Global EV Production in 2022, by Brand," Elements. April 20, 2023.
For KARS standard performance, top 10 holdings, risks, and other fund information, please click here.
Diversification does not ensure a profit or guarantee against a loss.