Defiance Launches Pure Play EV ETF

Exchange traded fund (ETF) provider Defiance ETFs announced the launch of the Defiance Pure Electric Vehicle ETF (EVXX), which intends to provide investors with exposure solely to EV makers.

The ETF is an actively managed fund with an expense ratio of 0.68%. While EVXXX did not outline any specific holdings, Tesla represents a likely candidate for heavy concentration, as it represents a high-profile example of a “pure electric vehicle” player.

EVXX will track the performance of the Solactive Pure US Electric Vehicle Index. The five largest electric vehicle manufacturers by market cap make up the index. The shares are equally-weighted on a quarterly basis.

“We continue to hear from investors that there is demand for a pure EV ETF, which captures this emerging megatrend without diluting the purity of the product with traditional semiconductor and auto stocks, which have little or no EV sales,” said Sylvia Jablonski, Defiance ETFs CEO.

As EV adoption is estimated to grow 35% in 2023, after last year’s explosive sales, it’s no surprise to see fund managers show a newfound interest in funds directly focused on the high-growth industry.

China has already surpassed its 20% EV share target ahead of schedule, while the US plans to invest $15 billion in EV infrastructure. The global EV market saw over 10 million EVs sold in 2022, and revenue is projected to reach $561.3 billion in 2023. By 2025, global EV sales are estimated to reach around 23 million units annually.

EVXX will find itself fighting for market share against other EV-centric funds such as the Autonomous & Electric Vehicles ETF, KraneShares Electric Vehicles and Future Mobility, Fidelity Electric and Future Transportation ETF and the leveraged Direxion Daily Electric and Autonomous Vehicles Bull 2X Shares.