Global EV Sales Poised To Grow In 2025: 3 ETFs In Focus

Several exchange-traded funds, or ETFs, allow investors to track the stocks of electric vehicle manufacturers, including Tesla TSLA or its China-based competitors, Nio Inc. NIO, Li Auto Inc. LI, XPeng XPEV and BYD BYDDF.

These funds allow investors to diversify their risks by owning chunks of shares in multiple EV plays rather than choosing to put all eggs in one basket. Here are three ETFs with exposure to Tesla and its rivals:

• iShares Self-Driving EV and Tech ETF IDRV: This fund tracks the NYSEA FactSet Global Autonomous Driving and Electric Vehicle Index. Its allocation is fairly evenly distributed among multiple auto companies. Tesla (4.11%), Li Auto (4.48%), XPeng (3.79%), BYD (4.08%) and Nio (3.99%) are among its top holdings. It charges a 0.47% expense ratio.

• SPDR S&P Kensho Smart Mobility ETF HAIL: This ETF tracks U.S.-listed companies participating in the smart transportation sector, as well as the S&P Kensho Smart Transportation Index. Major holdings include Tesla (1.53%), NIO (1.67%), Li Auto (1.8%), and XPeng (1.55%). The ETF has an expense ratio of 0.45% and about $24.62 million in assets under management (AUM) as of Jan. 2.

• Global X Autonomous & Electric Vehicles ETF DRIV: This ETF's exposure covers all aspects of the EV industry. The fund has $386.76 million of net AUM as of Jan. 2, and comes with an expense ratio of 0.68%. Major automakers, including Tesla (4.86%), XPeng (1.61%) and Nio (1.18%), are a part of the fund's holdings. General Motors GM, which is committed to go all-electric soon, also enjoys a share of the fund. The ETF also offers exposure to lucrative industries like semiconductors, batteries, and software for EVs. The fund mirrors the Solactive Autonomous & Electric Vehicles Index.

See Also: Tesla Analysts On Deliveries — EV Stock Could Have ‘Stormy Weather’ In Short Term

Why It Matters: S&P Global Mobility expects 15.1 million battery electric vehicles to be sold in 2025. That’s a 30% increase from 2024.

EVs are likely to account for 16.7% of global light vehicle sales in 2025, with China leading at 29.7% market share.

Tesla reported record EV sales in December. For the year, the EV-maker's China sales reached 657,000 vehicles—an 8.8% on-year increase. These numbers reveal that China remains critical for Tesla, contributing around 40% of its global deliveries in Q4.

Tesla's deepening foothold in China has also spurred a competitive battle of sorts involving prices. The Austin, Texas-based company made the smart move of putting a 10,000-yuan discount on Model Y loans through December. This prompted Nio and Li Auto to follow suit with zero-interest loans and cash subsidies.

Nio's December sales spiked 72.9% year-over-year while Li Auto posted a 16.2% increase.

BYD, for its part, offered up to 11.5% discounts and reaped the rewards in the form of a 50% year-over-year jump in December sales of new energy passenger vehicles.

XPeng, meanwhile, plans to onboard over 6,000 employees in 2025, Reuters reported. Anticipating intensified pricing pressures starting January, the company is also strategizing global expansion schemes, aiming to tap over 60 international markets by 2025.

This competition brings us to a broader trend: China expects to sell over 12 million EVs in 2025, doubling 2022 figures, and Tesla increasingly seeking a bigger piece of the pie.

Analyst Daniel Ives of Wedbush remains optimistic on Tesla. He predicts 20%-30% delivery growth in 2025 and maintains an "Outperform" rating with a $515 price target.

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