Electric Vehicle Demand Booms: Should You Invest in an EV-Focused ASX ETF?

Global EV sales up 30% this year, driven by 32% growth in China and 26% in Europe. Lithium miners are curtailing output, and depressed prices have forced many companies to close mines, reduce spending, and delay expansions. Investors can gain exposure to the EV sector through individual shares like Tesla (NASDAQ: TSLA) or the BetaShares Electric Vehicles and Future Mobility ETF (ASX: DRIV), which invests in 50 leading automotive technology companies. The ETF's top five holdings are Volvo AB, Tesla, BYD Co, Paccar, and Daimler. The ETF's share price is currently $9.58, up 16.4% over the year.

Global electric vehicle (EV) sales surged by 30% in 2025, driven by robust growth in China and Europe. According to Rho Motion, 9.1 million EVs were sold worldwide in the first half of 2025, up 28% year-over-year (YoY). China led with 5.5 million units sold, followed by Europe with 2 million units. North America, however, lagged behind with just 900,000 units sold [2].

The surge in EV sales comes amid a challenging backdrop for the lithium market. Lithium miners have been curtailing output due to depressed prices, forcing many companies to close mines, reduce spending, and delay expansions. This supply crunch has significant implications for the EV sector, which relies heavily on lithium for battery production.

Investors looking to gain exposure to the EV sector can consider individual shares like Tesla (NASDAQ: TSLA) or the BetaShares Electric Vehicles and Future Mobility ETF (ASX: DRIV). The ETF invests in 50 leading automotive technology companies, with its top five holdings being Volvo AB, Tesla, BYD Co, Paccar, and Daimler. As of July 2, 2025, the ETF's share price is $9.58, up 16.4% over the year [2].

Despite the challenges in the lithium market, the EV sector remains a promising investment opportunity. The increasing demand for EVs, driven by environmental concerns and government incentives, is expected to continue. Moreover, advancements in battery technology and the development of alternative fuel technologies, such as E-fuels, are likely to further boost the EV market.

References:
[1] https://www.sciencedirect.com/science/article/abs/pii/S1364032125007063
[2] https://oilprice.com/Energy/Energy-General/The-US-Is-Falling-Behind-in-the-Global-EV-Race.html