The automobile industry is set to undergo significant changes in the years ahead. Naturally, investors will want to hop on this growth train as soon as possible. The Evolve Automobile Innovation ETF (TSX:CARS) invests in equities that are directly or indirectly involved in developing electric drivetrains, autonomous driving or network connected services for automobiles.
A recent report from Allied Market Research forecasts that the global electric vehicle market will reach approximately $567 billion by the year 2025. This would represent a CAGR of 22.3% from 2018 to 2025. Many of the top automobile manufacturers are set to unveil EVs in the first half of this decade.
Autonomous vehicles are another game-changer, though this technology is coming along far more slowly. A report from Kenneth Research estimates that the global self-driving car market will expand at a CAGR of 36.2% from 2018 to 2023, producing revenues of over $170 billion by the end of the projected period.
Shares of the Evolve Automobile Innovation ETF climbed 52% in 2019. The ETF has increased 5% so far this year as of close on January 17. Some of the top holdings in the ETF include NIO Inc. (NYSE:NIO), the Chinese automobile manufacturing giant, and Tesla (NASDAQ:TSLA), which has fueled growth in the ETF in recent months.
Tesla has beaten out short sellers, at least in the near term, by beating out production forecasts and securing $1.4 billion in funding from multiple Chinese banks.
This ETF is trading near 52-week highs, but it is hard not to like its prospects in the decades to come.
