October 27, 2021

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One ETF to Watch as Tesla Makes Record Deliveries

Electric car maker Tesla delivered a record number of vehicles recently, despite staring down a semiconductor shortage that’s racked the automotive industry.

“On Saturday, Elon Musk’s electric carmaker said it delivered 241,300 cars worldwide in the latest quarter,” a Motley Fool article reported. “It’s a record for the company that not only blew past analyst expectations, but also suggested that Tesla’s suffered little impact from the supply chain nightmares that have stalled rivals. For all his annoying tweets, maybe Musk should let the numbers do the talking.”

As mentioned, Tesla is delivering these numbers despite a semiconductor shortage that’s hit the automotive industry with a gut punch. According to the article, AlixPartners forecasted that automotive manufacturers will produce 7.7 million fewer vehicles in 2021 as a result of the shortage, which is almost double their original number.

“Taking a step back, with the chip shortage a major overhang on the auto space and logistical issues globally, these delivery numbers were ‘eye popping,’” wrote Wedbush Securities analysts Daniel Ives and John Katsingris in a note.

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An Autonomous Vehicle and EV ETF Option

Tesla is the top holding of the Global X Autonomous & Electric Vehicles ETF (DRIV). The ETF itself is up about 15% so far in 2021, based on Morningstar performance numbers.

DRIV seeks to invest in companies involved in the development of autonomous vehicle technology, electric vehicles (‘EVs’), and EV components and materials. 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.

DRIV seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive Autonomous & Electric Vehicles Index. The fund offers:

  • High growth potential: DRIV enables investors to access high growth potential through companies critical to the development of autonomous and electric vehicles — a potentially transformative economic innovation.
  • An unconstrained approach: DRIV’s composition transcends classic sector, industry, and geographic classifications by tracking an emerging technological theme.
  • ETF efficiency: In a single trade, DRIV delivers access to dozens of companies with high exposure to the autonomous and electric vehicles theme. Having the disruptive automotive industry in an ETF wrapper also gives traders access to short-term market maneuvers within the sub-sector.

For more news, information, and strategy, visit the Thematic Investing Channel.

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