Rising EV Sales Are Just One Factor Driving Growth In This Auto Innovation Fund

Among the key investment themes to crop up through 2020 was the massive groundswell of capital that funneled into the electric vehicle industry, from Tesla Inc’s (NASDAQ: TSLA) 700% move over the course of the year to the array of battery and electrification-focused special purpose acquisition companies (SPACs) introduced to the market.

But while the market trend certainly illustrates the degree of interest Wall Street has in the EV space, according to Evolve ETFs Chief Executive Officer Raj Lala, the thesis motivating those investments is far more compelling,

“What we’re seeing now is significant government demand for these technologies combined with significant investment from automakers, partly driven by government targets and partly driven by new electric vehicle companies,” said Lala in a recent interview with Benzinga. “Every country in the developed world has set a target date anywhere from 2025 to 2040 to eliminate gas and diesel cars. Every automaker in the world has consequently put those timelines on their roadmap.”

Benzinga spoke with Lala about the various, private, public and international factors influencing the EV market and how those themes have been incorporated into the provider’s Evolve Automobile Innovation Index Fund (TSX:CARS.TO), Canada’s first diversified automobile innovation ETF and one of Canada’s top performing ETFs last year.

Annualized Performance (%)

ETF	Ticker	1 Year	3 Year	Since Inception*
Evolve Automobile Innovation Index Fund (Hedged) Evolve Automobile Innovation Index Fund (Unhedged) Evolve Automobile Innovation Index Fund (USD)	CARS CARS.B CARS.U	93.28 100.58 104.57	33.06 35.72 34.99	31.57 34.35 31.71

Source: Bloomberg, as at December 31, 2020. 
*Since Inception of CARS and CARS.B on Sept 29, 2017 and CARS.U on Nov 3, 2017.

Competition In A Growing Market

From a fundamental perspective, Lala pointed to the clear sales trends among EV and component manufacturers. Tesla has obviously been the poster child of that growth, more than doubling its vehicle sales between Q2 and Q4 2020.

However, beyond individual companies, sales of electric vehicles have surged internationally. China is estimated to …

Full story available on Benzinga.com