Did you know that more than 10 million electric cars were on roads in 2020?
By 2030, this global figure is set to rise to 145 million. Even more impressive, electric vehicles are projected to make up 31% of the global fleet by 2050.
The rapid rate of growth is attracting the attention of several investors, demanding that attention be paid to both risks and opportunities.
Effects of the Electrification of Cars in the Stock Markets
Electric cars are a new player in the industry and are positioned for continued innovation. Investors considering the electric car market need to assess the global growth, factors driving electric car sales, market challenges, and stocks and investment risks.
The electronic vehicle (EV) industry has already experienced notable growth within the last decade, and this is seen in the rise of EV stocks in countries around the world. For example, China has seen a rise in stocks such as Nio, XPeng, and Li Auto.
At the moment, the market continues to grow on a global scale and EV stocks are considered a hot commodity. Consider that Tesla stock has surged more than 20,000% since it went public in 2010, and the company holds a market capitalization of more than $1.141 trillion.
Even with continued growth on the horizon, investors need to consider the future challenges of investing in EV stocks.
Some of these warning signs have already cost investors money. For example, Nikola (NKLA) soared at the start of 2020 and subsequently nosedived, dropping 47% in a three month period.
Some experts predict that the EV stock bubble will burst in the medium to long term, due to the high valuations of the stocks. Only time will tell.
How to Buy Electric Car Stocks
If you’re weighing up the pros and cons of investing in the EV industry, there are a few considerations to keep in mind.
- Pay attention to companies with a strong track record of earnings growth
- Consider the various aspects of EV stocks which include battery stocks, charging stocks and EV suppliers
- Investing in EV parts is a popular place to start
- Diverse investment options include electric car exchange-traded funds (EFTs)
The previous performance of EV stocks has inspired many investors to put their money toward electric cars that produce less pollution and offer a more sustainable way of living. Ultimately, all pros and cons need to be considered, while acknowledging the potential risk of loss.
Note: Please do not invest money or assets in the financial markets that you cannot afford to lose. This article should not be construed to be investment advice and is for information purposes only