Beyond the boundaries of the United States, China emerges as the leading global automobile market. This, combined with China's status as a major producer of sustainable energy and provider of advanced clean technology, naturally positions the world's second-largest economy as fertile territory for the widespread adoption of electric vehicles (EVs).This plays a significant role in …
Beyond the boundaries of the United States, China emerges as the leading global automobile market. This, combined with China’s status as a major producer of sustainable energy and provider of advanced clean technology, naturally positions the world’s second-largest economy as fertile territory for the widespread adoption of electric vehicles (EVs).
This plays a significant role in Tesla’s active pursuit of market share within China. Investors can effectively participate in the broader trend of EV adoption in China through the KraneShares Electric Vehicles and Future Mobility ETF (KARS).
However, similar to other ETFs in the electric vehicle sector, KARS prominently includes Tesla as its primary holding. Nevertheless, other components within the fund contribute to its attractiveness. A notable example is BYD, China’s leading electric vehicle manufacturer, which holds the seventh-largest position in the KraneShares fund, representing approximately 3% of its total portfolio weight.
According to a recent report from UBS, BYD’s competitive cost advantage is attributed to its vertical integration, favorable specifications, and substantial production scale. This competitive edge positions it favorably not only against foreign incumbents but also against emerging Chinese EV startups.
While Tesla presents a competitive challenge to BYD, the China-based EV giant adeptly defends its market position against other international rivals and outperforms domestic competitors.
Additionally, UBS maintains a positive outlook on Li Auto, regarding it as one of the primary drivers of EV growth in China alongside BYD. They also hold a favorable view of Contemporary Amperex Technology, a battery manufacturer. These two companies, Contemporary Amperex and Li Auto, together constitute nearly 7% of KARS’ portfolio, ranking as its fourth- and ninth-largest holdings, respectively.
Risk Disclaimer
Please note that this articles does not offer any instructions or suggestions regarding investment decisions. Therefore, it is essential that you carefully evaluate your financial situation and conduct thorough analysis, or seek advice from a qualified professional, before making any investment decisions.
