How To Invest in EV Stocks From India?
August 27 2022 - Team Stockal
An Investment in US EV stocks may appear like an attractive addition to your investment portfolio, whether you’re an environmentalist, a boom opportunist, or a meme stock enthusiast. Investments in EV producers are of great interest to the environment, social and governance (ESG) investors, and their interest is sustained and drastically increasing every year. For eg., a record $120 billion was invested in ESG-related equities last year.
Electric Vehicles (EVs) have been a major contributor to ESG assets, which are growing phenomenally. Global ESG assets may reach $41 trillion by 2022 and $50 trillion by 2025, accounting for one-third of the anticipated total assets under management globally.
Europe, which until 2018 dominated the business, is home to half of all ESG assets worldwide. The US is still dominating the globe with more than 40% growth over the previous two years and is predicted to reach $20 trillion in 2022, despite its growth rate decreasing this year.
The United States is driving both the EV and the ESG waves simultaneously. After dominating the ESG market, the US is also gearing up to take over the EV stock market. According to forecasts, the US electric vehicle industry is predicted to increase from $28.24 billion to $137.43 billion between 2021 and 2028, with a CAGR of 25.4%.
It is hardly unexpected that all investors want a piece of the EV game. So let’s get into it and understand how to invest in EV stocks from India?
Which are the major EV Stocks in the US market?
The market for electric vehicles is anticipated to explode in the upcoming years. When there are so many enterprises vying for the same market share, it can be difficult to decide which ones merit investment. Some of the prominent EV US stocks to consider right now are listed below:
- Tesla, Inc. (TSLA)
Making a list of the top EV stocks without including Tesla would be folly. The world’s top EV producer continues to lead the industry in terms of technological innovation, notably with regard to battery chemistry. That dominance is waning, though, as more competitors enter the market. Tesla has announced a plan for a 3-for-1 equity split that will take place as a stock dividend. The split won’t be authorised until Aug ’22 shareholder meeting, but if it is approved, it will expand the pool of potential stock buyers for the firm.
Currently, Tesla trades at $721.6, with a P/E ratio of 110.7 and a market cap of $769.51 billion.
Nio is considered the “Tesla of China”, and has enjoyed a considerable momentum increase lately. They create, manufacture, and sell electric vehicles. Nio has a strong track record of growth and financial success, with a sizable presence in China and a global reach. Additionally, they are spending a lot of money on cutting-edge technologies that can support future growth like autonomous cars.
Currently, Nio trades at $20.84 with a market cap of $34.55 billion.
If you know about nickel mining, BHP Group might not spring to mind while thinking of EV stocks. Nickel, however, is an essential component of the chemistries used in EV batteries. The supply of nickel is having problems keeping up with demand. For nickel mining companies like BHP, this should be favourable. Last year, Tesla and BHP reached an agreement to purchase ethically produced nickel from Australia.
Currently, BHP trades at $ 50.76, with a P/E ratio of 7.63 and a market cap of $183.612 Billion.
Sociedad Quimica y Minera de Chile (SQM), a company that specialises in chemicals, has witnessed a rise in its share price as a result of rising lithium prices, which have been driven up by accelerating EV demand. As a consequence of higher lithium prices, the company, a key producer of lithium, announced a 12-fold increase in quarterly earnings.
Currently, SQM trades at $ 85.85, with a P/E ratio of 20 and a market cap of $ 24.01 Billion.
Another business that gains from the increase in lithium demand is Albermarle. The U.S.-based lithium firm, which receives 40% of its revenue from lithium, has been growing internationally to match the spike in demand. They intend to construct a third chemical conversion facility in Chile to increase its lithium output. To further enhance capacity, it has also made new investments in Australia.
Currently, ALB trades at $ 203.88, with a P/E ratio of 94.85 and a market cap of $25.38 Billion.
How to invest in EV Stocks from India?
- Direct investment in EV stocks:
When investing directly, you can buy stocks in all of the categories as mentioned above of companies. With Stockal, you may quickly and simply invest directly in the stocks of electric vehicle manufacturers. You may invest any fraction of a dollar using Stockal, so you can choose the amount that best matches your budget:
- Formulate your risk appetite:
Before making any investments in any financial product or industry it is important to gauge your risk appetite. High risk , high return.
- Select an investment medium:
Since India now permits investments in US stocks, there are various mediums for investments. Stockal is one such medium that makes investments in the US easy. Compliant and quick.
- Decide the quantum according to risk appetite and investment goals:
After selecting the medium and gauging your risk appetite, it is important to understand your budgetary constraints. Stockal lets you invest in shares fractionally so you may necessarily not have to shell out a huge amount to invest in a particular US stock.
- Place the order:
After deciding on all of the above, make sure you complete your documentation and compliance, then simply, with a click of a button place the order.
- Basket Stacks:
Stacks are pre-assembled collections of stocks and exchange-traded funds that you can buy with a single click. They are created by hedge funds, experienced wealth management businesses, global asset management corporations, and portfolio managers.
Various pre-assembled portfolios made up of these instruments are typically centred on a certain topic or notion, such as capital goods, ESG, internet technologies, healthcare, and electric cars.
One such successful strategy that can help enable you to keep your money in the right investments and support your wealth is Stockal’s Stacks. You may invest in stacks in Stockal that focus on investment in US EV stocks.
An investor might not be able to purchase numerous stocks. The approach necessitates a high level of expertise and comprehension of the EV market and its participants. Investing in EV equities may also be done through sector-tracking ETFs.
- Mutual Funds:
Any investor may diversify their portfolio, particularly in US markets, by investing in mutual funds that include US firms. Mutual funds help stabilise a hedge against rupee devaluation and reduce the risk of a whole equity portfolio by providing diversity.
How does Stockal’s Curated EV Portfolio Stack work?
When it comes to buying a car, we spend a massive amount of time understanding which would be the right purchase. A similar quandary arises when we wish to invest in a company that makes cars. In an effort to address the “how to invest in EV stocks from India” conundrum, Stockal provides curated pre-made portfolios that are structured around a certain idea or subject.
Top financial experts design each stack to fit different investing objectives, risk appetites, and strategies. As part of a thorough research process that ensures the exact matching of investment ideas to prospects, several forward-looking macro & micro uptrends are analysed to find drivers of value-creation in the ecosystem.
Similarly, industries involved in EV technology, autonomous driving, batteries, EV parts, and general CleanTech businesses make up the Electric Vehicles Stack. Investments in this stack are limited to EV firms with promising development potential and acceptable risk.
- Is it risky investing in EV ETF or stacks?
Yes, Stacks, ETF and mutual funds focused on one sector can be risky. As government policies change, sector-specific instruments may feel the effects far more.
But as they say, high-risk, high reward.
- Is it difficult to invest in US stocks?
Absolutely not, Stockal’s platform lets you invest in global investing with ease. Also Stockal provides curated pre-made portfolios that are structured around a certain idea or subject.
- How much Tax do I have to pay once I sell my stocks, ETFs or Mutual funds?
Stockal blogs give you a lot of information on Taxes and related topics. Please click this link to know more about Tax implications for Indians who invest in U.S. stocks
- Is the EV sector a high-growth sector?
The EV sector has been growing in the US right now, and the trend of EV is catching up all over the world. Please read the blog for more information on the US EV sector.
EV stocks have increased outside of Tesla, and as the use of EVs as a whole rises, a wider range of EV businesses are emerging outside of the automobile sector. Products related to EVs and automobile batteries are provided by several other businesses. The market for electric cars may be the next sector to grow, and contrary to what we now believe might have a significant worldwide influence. Due to the growth of the EV business, investors may have a once-in-a-lifetime opportunity to accumulate wealth over the long term. Sign up through Stockal today to be an early adopter of this wealth creation regime.