KraneShares Electric Vehicles and Future Mobility (KARS) is an exchange-traded fund (ETF) that provides investors with a chance to participate in the booming electric vehicle (EV) and future mobility sectors. Launched in 2018, KARS tracks the Bloomberg Electric Vehicles Index, which selects companies across a wide spectrum of the evolving transportation landscape.
KARS offers a diversified approach, encompassing more than just EV manufacturers. The ETF invests in companies involved in various aspects of future mobility, including:
EV Production: Leading car manufacturers producing electric vehicles like Tesla, BYD, and Volkswagen.
Components and Materials: Companies supplying critical components for EVs, such as lithium-ion battery makers (Panasonic) and electric motor manufacturers.
Autonomous Driving: Firms developing self-driving car technology, including software and hardware companies at the forefront of this revolution.
Shared Mobility: Companies offering car-sharing and ride-hailing services that are likely to transition towards electric fleets.
Future Mobility Infrastructure: Businesses involved in building the infrastructure needed to support widespread EV adoption, such as charging station manufacturers.
This diversification aims to capture growth across various segments of the future mobility market, reducing risk compared to an ETF focused solely on EV manufacturers.
The future of KARS is tied to the growth of the electric vehicle and future mobility industries. With increasing government support for clean transportation initiatives, rising consumer demand for EVs, and continual advancements in autonomous driving technology, the long-term outlook appears promising. However, investors should be aware of the inherent risks associated with thematic ETFs like KARS.
The fund's concentration on a specific theme can lead to higher volatility compared to broader market ETFs. Additionally, KARS's success relies on overcoming challenges within the industry, such as battery range limitations, charging infrastructure deficiencies, and the regulatory hurdles surrounding autonomous vehicles.