Global X launches Autonomous and Electric Vehicles ETF
ETF provider Global X Funds has listed the Global X Autonomous & Electric Vehicles ETF (Nasdaq: DRIV).
The ETF is designed to track the Solactive Autonomous & Electric Vehicles Index and holds a basket of companies involved in the production or development of electric vehicles (EVs) and autonomous vehicles (AVs). This includes companies involved in the development of autonomous vehicle software and hardware, as well as companies that produce EVs, EV components such as lithium batteries, and critical EV materials such as lithium and cobalt.
Electric vehicles are showing signs that they are at the early stages of an adoption curve that could spark a rapid embrace of the technology. In 2017, electric vehicle sales represented 1.7 per cent of all vehicle sales globally, exceeding one million for the first time, and increasing 51 per cent from 2016.
The firm writes that while autonomous vehicles are not yet as common as EVs, the race to full automation that requires no human input in any circumstance is well under way. According to some estimates, by simply freeing drivers of the necessity of spending time driving, AVs could boost US GDP by USD0.5-2.3 trillion by 2030.
"Electric and autonomous vehicles are poised to have one of the most profound impacts on society since the industrial revolution, affecting a wide range of sectors in ways that we've only just begun to imagine," says Jay Jacobs, director of research at Global X Funds. "In bringing DRIV to market, we're excited to deliver access to revolutionary shifts in transportation that are at the early stages of their disruptive potential. And we're equally excited to watch how these technologies will change our daily lives."
The adoption of electric vehicles is expected to see a boon from bans on new sales of gas cars by major economies around the world. Norway, for example, proposes a ban on the sale of gas powered vehicles by 2025 and has already made meaningful strides, with EVs representing 39 per cent of total sales in 2017. Others, like India, China, and the state of California, have announced similar aspirations. Various car manufacturers believe mass-market AV technology could be just a few years away, aiming for fully autonomous cars becoming commercially available between 2019 and 2021.
The fund is the sixth in Global X's suite of thematic technology ETFs. The suite totals USD3.91 billion in AUM, as of March 29, 2018.
For its part, index provider Solactive explains that the Solactive Autonomous & Electric Vehicles Index is an index tracking the performance of companies involved in the production of electric or hybrid vehicles and the development of self-driving technology. The index is based on ARTIS, a proprietary algorithm-based screening tool developed by Solactive. ARTIS is an acronym for Algorithmic Theme Identification System and makes use of systems such as natural language processing to select companies that have best exposure to specific themes.