Yahoo Finance Electrifying Opportunities in EV ETFs as Tesla & Ford Join Forces
Ford Motor F announced Thursday that it has entered into a ground-breaking agreement with Tesla TSLA, allowing Ford to access more than 12,000 Tesla V3 superchargers in North America, in 2024.
According to an article on Reuters, this partnership marks a significant milestone as Ford becomes the first major automaker to adopt Tesla's proprietary charging standard. By joining forces, Ford secures access to the largest network of high-speed Superchargers in the United States, amplifying convenience and charging options for its electric vehicle (EV) customers.
Why the Deal is Important?
The availability of charging stations has long been a significant obstacle to wider adoption of electric vehicles. In a move to address this challenge, Tesla made a noteworthy announcement in last November year, declaring its intention to open its proprietary charging design to other automakers and charging network operators.
Tesla has developed an adapter for Ford EVs with CCS ports to access Tesla's V3 Superchargers. Starting in 2025, Ford will incorporate Tesla's charging standard into its EVs, eliminating the need for an adapter and providing direct access to Tesla Superchargers. This partnership expands charging options for Ford EV owners, simplifying the charging process.
With an impressive fleet of 17,711 Superchargers, Tesla dominates nearly 60% of the U.S. fast-charging market. These Superchargers have the capability to add hundreds of miles of driving range in under an hour. Tesla is embracing the Biden administration's initiative by integrating the rival CCS standard at chosen U.S. charging stations. This move demonstrates Tesla's dedication to promoting wider accessibility and compatibility in charging networks, aligning with the government's push for expansion through substantial subsidies.
Government's Push for Electric Vehicle Adoption
Since assuming office, President Biden's efforts have already yielded significant results, with electric vehicle sales tripling and the availability of public charging ports increasing by over 40%. The United States now boasts a remarkable three million EVs on the roads and a network of over 135,000 public EV chargers, as per reports from the White House.
In pursuit of President Biden's ambitious target to achieve 50% EV sales by 2030, the White House unveiled a comprehensive plan, the EV Acceleration Challenge, to facilitate America's monumental transition to EVs. This initiative encompasses both public and private commitments aimed at bolstering the EV market.
A New Binational EV Corridor
The United States and Canada have jointly introduced the Binational Electric Vehicle Corridor, an extensive network of charging stations strategically positioned to facilitate seamless travel between the two countries. This corridor will incorporate charging stations approximately every 50 miles along the route.
Renowned for having the world's largest market-based energy trading relationship, Canada and the United States are now collaboratively expanding their infrastructure to support the growing demand for EVs. The corridor encompasses a total of 215 charging stations strategically located, ensuring enhanced convenience for travelers relying on electric vehicles.
ETFs in Focus
With a massive shift to EVs underway, below, we highlight a few ETFs which may help to jump on the bandwagon.
First Trust S-Network Future Vehicles & Technology ETF (CARZ)
The fund closely tracks the performance of the S-Network Electric & Future Vehicle Ecosystem Index. With a basket of 102 securities, CARZ has major allocations to information technology and consumer discretionary sectors, with 54.74% and 26.32%, respectively.
The fund has an exposure of 4.33% to Tesla, along with 0.89% exposure to Ford. However, the top spot is taken by NVIDIA NVDA with 6.26%. It has gathered an asset base of $40.7 million and charges an annual fee of 0.70%.
With a Zacks ETF Rank #3 (Hold) and a Medium risk outlook, the fund has generated 21.90% year to date and 4.72% over the past three months.
Global X Autonomous & Electric Vehicles ETF (DRIV)
DRIV closely tracks the performance of the Solactive Autonomous & Electric Vehicles Index, with 75 securities in its basket. The fund has major allocations in consumer discretionary with 37%, followed by information technology with 28.6%.
NVIDIA takes the top spot with 6.66%, followed by Tesla (4.32%). The fund also has exposure to Ford with a 1.47% share of the assets. Commanding an asset base of $829.61 million, DRIV charges an annual fee of 0.68%.
Having earned 15.2% year to date, the fund has fallen 0.48% in the past three months.
KraneShares Electric Vehicles & Future Mobility ETF (KARS)
The fund seeks to track the performance of the Bloomberg Electric Vehicles Index with a basket of 65 securities. Consumer durables takes the top spot in the allocation table with 34.1% of the assets.
KARS has allocated 3.83% of the assets to Tesla, with Ford being allocated 0.98%. The fund charges an annual fee of 0.70% and has amassed $178.01 million in its asset base.
Having earned 3.84% year to date, the fund has significantly fallen by 13.32% over the past year.
Simplify Volt RoboCar Disruption and Tech ETF (VCAR)
The fund employs an active strategy and commands a basket of 49 securities. The fund has a tilt toward electronic technology, with a 36.47% share of the assets.
Tesla has been allocated 8.89% of the asset, with the highest allocation of assets going to Microsoft MSFT with 11.66%. The fund has gathered an asset base of $3.39 million and charges an annual fee of 0.95%.
VCAR has added 29.71% year to date but has lost 22.87% over the past year.
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Ford Motor Company (F) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Global X Autonomous & Electric Vehicles ETF (DRIV): ETF Research Reports
Tesla, Inc. (TSLA) : Free Stock Analysis Report
First Trust S-Network Future Vehicles & Technology ETF (CARZ): ETF Research Reports
KraneShares Electric Vehicles and Future Mobility Index ETF (KARS): ETF Research Reports
Simplify Volt Robocar Disruption and Tech ETF (VCAR): ETF Research Reports
