EV demand comes roaring back. Time to buy this EV-focused ASX ETF?

Global demand for electric vehicles (EVs) is booming. 

The resurgence has been fuelled by robust global EV sales this year, which are up 30% compared to the same period in 2024, according to the Financial Review, citing Canaccord Genuity data.

The new demand level is underpinned by 32% growth in China, where strong competition between domestic car makers is lowering prices. In Europe, EV sales have also jumped 26% this year. 'Rest of World' accounted for 41% of the growth, offsetting flat sales growth in North America.

Canaccord Genuity had previously forecast a "likely slow-down" in global electric vehicle sales in 2025, due to tariffs, policy changes, and economic uncertainty. 

The brighter outlook for EV sales has coincided with signs that lithium miners are finally starting to curtail output, particularly in China as the government cracks down on overcapacity across commodity markets, the Financial Review said.

Depressed prices have forced many companies globally to close lithium mines, reduce capital expenditure, and delay project expansions.

So, is it time to buy an EV-focused ASX ETF?

Data suggests that a record number of consumers are attracted to the advantages of EVs, which include lower running and maintenance costs, and environmental benefits like reduced air pollution.

As demand for EVs continues to soar, many investors might also be thinking of ways to gain exposure to the EV sector. 

Here are two options they can consider.

Australian investors can buy individual shares on the NASDAQ in EV companies such as Tesla (NASDAQ: TSLA).

Tesla is well-known for its electric cars – like the Model S, Model 3, Model X, and Model Y – which helped revolutionise the EV market. Tesla's share price is 46.25% higher over the year, currently changing hands at US$325.90 a piece. 

Another option for Australian investors to gain diversified access to the EV market is via the exchange-traded fund (ETF) BetaShares Electric Vehicles and Future Mobility ETF (ASX: DRIV).

The ETF invests in 50 of the world's leading automotive technology companies. It charges an annual management fee of 0.67%. As of 28 July, its top five holdings were Volvo AB (8.2%), Tesla (7.6%), BYD Co (7.2%), Paccar (6.8%), and Daimler (5.5%).

This ASX ETF also has allocations in other EV-related sectors, such as battery manufacturers, semiconductor suppliers, and charging infrastructure providers.

The BetaShares Electric Vehicles and Future Mobility ETF share price is changing hands 0.52% lower at lunchtime today, at $9.58. Over the year, the share price is 16.4% higher.

The post EV demand comes roaring back. Time to buy this EV-focused ASX ETF? appeared first on The Motley Fool Australia.

Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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