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business newsThree ETFs to Play Electric Vehicles
Demand for electric cars is expected to spike, paving the path to prosperity for these ETFs.
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As President Obama continues to place an importance on energy efficiency and lowering carbon emissions, demand for electric vehicles is expected to spike paving the path to prosperity for the First Trust Smart Grid Infrastructure ETF (GRID), the Utilities Select Sector SPDR (XLU), and the Global X Lithium ETF (LIT).
The National Highway Safety Commission forecast that nearly 20% of all automobiles in the US will be running on some sort of a hybrid mechanism by 2015. Furthermore, Aaron Levitt of Investopedia states that the US has committed $2 billion in Recovery Act spending for advanced-battery production and nearly $25 billion for programs to encourage carmakers to retool their production lines for production of more fuel-efficient vehicles.
As a result, many carmakers are starting to make changes to their lineups and offer these hybrid vehicles. The most recent change came from General Motors as it announced the upcoming release of the Chevrolet Volt, which is an electric vehicle that runs on a battery and electricity generated from a gas generator. Additionally, German automaker Volkswagen plans on releasing all-electric within the next year or two. 
This phenomenon of electric vehicles has already been somewhat of a hit with consumers, illustrated by the performance of Tesla Motors (TSLA), which has witnessed insatiable demand for its Tesla Roadster. As a result, Tesla expects to start production of a five-seat family sedan next year to expand its lineup.
At the end of the day, as governments continue to push for cleaner energy and lower carbon emissions, electric vehicles are expected to gain popularity giving support to the aforementioned ETFs.
- GRID is bound to reap the benefits of the infrastructure improvements and developments that will be required to sustain an electric cat movement, such as new transmission lines, power plants, and charging stations.
- XLU will likely reap the benefits of increased electricity consumption.
- LIT will likely reap the benefits of increased demand of lithium-ion batteries, which are essential to electric and hybrid vehicles.
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