Investing in EV stocks or ETFs may offer new opportunities that were not readily available in the past, but you must still exercise prudence when selecting them. At the very least, you must have a clear understanding of the EV industry and familiarise yourself with the trends, key players and the global shift toward EV adoption. Once you are clear about the industry’s dynamics, you will be in a better position to make informed investment decisions.
The EV industry is highly competitive with new entrants entering the market every year. Because every player is vying for market shares with newer and better technologies, assessing a company’s innovation qualities may provide insights into how well its stock will perform alongside its peers. While the future of EV stocks or ETFs look promising, the EV industry is still an evolving sector that is less stable than the ICE vehicle market. Any sudden changes in government regulations, infrastructure development and new technologies can produce a large impact on the EV industry and affect the profitability of key players. For example, the limited number of charging stations is already hurting EV sales.