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As electric vehicles (EVs) go mainstream, now may be a good time to invest in this growing industry. Not only are EVs heavily subsidized by the government, but consumers are becoming increasingly willing to pay a premium for sustainable products—a recipe for long-term growth. Fortunately, there are many ways to gain exposure to the EV market. Read on to learn how.
Key Takeaways
- The electric vehicle (EV) market is growing rapidly, with EVs projected to make up over 40% of global car sales by 2030.
- Investors can gain exposure by buying shares of companies that produce EVs, batteries, parts, raw materials, and charging infrastructure.
- For a diversified approach, invest in EV-focused exchange-traded funds (ETFs), which offer broad industry exposure and reduced risk.
Electric Car Industry Overview
In 2025, more than 1 in 4 cars sold will be electric. By 2030, EVs’ market share is expected to exceed 40% as they become even more affordable. As an investor, this is good news. It means you can ride this wave of growth to earn high potential returns.
Direct Investment Options
Here are some ways to invest directly in the EV industry:
EV Manufacturers
EV automaker Tesla (TSLA) is an obvious investment choice. The company launched in 2003 and released its first electric car, the Roadster, in 2008. Since then, Tesla has become the most well-known EV brand with a market capitalization that often exceeds that of all major American automakers combined. As of May 30, 2025, Tesla’s market cap was $1.12 trillion.
You can trade Tesla stock on the Nasdaq stock exchange through a brokerage like Vanguard or Fidelity. Simply open an account and start buying shares (or fractional shares) of the company. While Tesla’s stock value has been highly volatile over the last few years, it stands to gain from any long-term growth of the EV industry.
Other publicly traded EV manufacturing companies include Rivian (RIVN), NIO (NIO), Li Auto (LI), XPeng (XPEV), and Lucid Motors (LCID).
Alternatively, you can invest in legacy manufacturers who have added EVs to their car lineup. Among others, these include General Motors (GM), Toyota (TM), Honda (HMC), and Ford (F).
EV Parts
Another way to invest in the EV industry is to invest in EV parts. For example, the battery is the most expensive part of an electric car. Most EV manufacturers use lithium-ion batteries sourced from suppliers like Plug Power (PLUG), QuantumScape (QM), and Solid Power (SLDP).
You can also invest in other EV parts like chips, such as those made by NVIDIA (NVDA) and Ambarella (AMBA); lidar sensors, such as those made by Luminar (LAZR); or EV drivetrains, such as those made by Hyliion (HYLN).
Raw Materials
EV batteries rely heavily on raw materials (aka commodities) like lithium, copper, nickel, iron, silver, aluminum, and graphite. As a result, demand for them may rise as the EV industry grows. You can invest in metal production and distribution through companies like Sociedad Quimica y Minera S.A. (SQM) or Vale S.A. (VALE).
Charging Infrastructure
While you can charge most EVs with a standard wall outlet (Level 1 charging), it’s much slower than using a Level 2 or Direct Current Fast Charging (DCFC) station. Across the U.S., there are over 200,000 public charging stations—a network well ahead of schedule to meet a national goal of 500,000 chargers by 2030.
To invest in EV charging infrastructure, consider buying stock shares of companies like Blink Charging (BLNK), EVgo (EVGO), and ChargePoint (CHPT). EV charging stations are likely to grow in tandem with the EV industry as a whole.
Important
On January 10, 2025, the U.S. The Department of Transportation’s Federal Highway Administration (FHWA) announced $635 million in grants to continue building electric vehicle charging and alternative fueling infrastructure with funding from the Bipartisan Infrastructure Law. This will add over 11,500 electric charging ports across 27 states, four Federally Recognized Tribes, and the District of Columbia.
Electric Vehicles Exchange-Traded Funds
To invest in the EV industry without picking individual stocks, consider investing in exchange-traded funds (ETFs) that follow EV-related indexes. This is a great way to spread your risk across multiple EV companies, so your returns don’t depend on any one company. Instead, you’ll capture any growth or contraction across the broader industry.
Another benefit of ETFs is that they can be traded on the stock market just like stocks. This makes them highly liquid, so you can easily adjust your investment positions during market hours as needed (though a buy-and-hold strategy may yield better long-term returns).
Some EV-related ETFs to choose from include:
- KraneShares Electric Vehicles & Future Mobility Index ETF (KARS)
- iShares Self-Driving EV and Tech ETF (IDRV)
- Global X Autonomous & Electric Vehicles ETF (DRIV)
- Global X Lithium & Battery Tech ETF (LIT)
- First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN)
Is Investing in Electric Vehicles a Good Long-Term Strategy?
It can be. Many experts believe the EV industry will continue to grow due to rising consumer demand and government incentives. However, every investment carries risk, so carefully study the industry before deciding. In the case of EV investment, risk includes the possibility that future legislation will deprioritize green investment.
What Are the Risks of Investing in the EV Industry?
Some risks include high market volatility, fierce competition between EV companies, uncertainty over how the technology will evolve, supply chain issues, and changing regulatory environments.
Can I Invest in the EV Industry Without Buying Individual Stocks?
Yes, you can invest through EV-focused ETFs, which follow the performance of multiple EV companies through an index.
How Do I Choose Between EV Stocks vs. ETFs?
Stocks offer higher potential returns (and risk) from individual companies, while ETFs provide diversification across the industry, resulting in lower potential returns but less volatility.
What Should I Look for When Evaluating an EV Company?
Among other things, look for innovation, sizable market share, healthy financial performance, and strategic partnerships that could boost the company’s growth.
Will Electric Vehicles Become the New Norm?
Possibly. Electric vehicles are becoming increasingly popular, with global EV sales growing rapidly and projections showing they could make up over 40% of new car sales by 2030.
The Bottom Line
The electric vehicle market is growing fast. Whether you invest directly in automakers, battery suppliers, raw materials, or charging infrastructure—or take a broader approach with EV-focused ETFs—there are many ways to gain exposure to the industry. To get started, assess your risk tolerance and choose a strategy that aligns with your financial goals. Don’t be afraid to diversify your investments to balance potential rewards with long-term stability.
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