Investors interested in electric cars have a variety of options. Automakers such as Tesla Motors exclusively manufacture electric vehicles and may be directly invested in by purchasing stock. Companies within the automotive sector that manufacture vehicle parts or supply raw materials used in producing electric cars are another means of gaining portfolio exposure to electric cars. Another slightly less risky option is to invest in exchange-traded funds (ETFs) with holdings in securities related to electric vehicle production or electric vehicle parts.

Some major automakers, such as Toyota, are investing heavily in electric vehicles and allow investors to choose both traditional and electric vehicles for their investments. Chevrolet and Nissan have also made notable electric car models available in the U.S. market. Investors should carefully consider available investment opportunities and evaluate the potential risk-return tradeoff offered by electric vehicles and the automotive industry.

Many manufacturers develop auto parts for traditional and electric vehicles. Polypore International (PPO) produces lead-acid batteries used in both conventional and electric vehicles. This stock offers investors the opportunity to invest generally in the production of vehicle batteries. As electric vehicle and conventional vehicle usage grows, more batteries will be needed, and this company will likely benefit from increased global car demand.

Another battery company, Plug Power (PLUG), manufactures hydrogen fuel cell batteries used in electric vehicles and many other types of electronic equipment. These batteries may replace lead-acid batteries in forklifts. Plug Power batteries are also used outside of the automotive industry, giving the company a large market.

Sociedad Quimica y Minera (SQM) is a major supplier of lithium, an element used in many batteries powering electric vehicles and other clean technologies. Investment in companies such as Polypore International, Plug Power, and SQM offers portfolio exposure to electric vehicles while also maintaining diverse holdings outside the automotive industry.

Electric Vehicles Exchange-Traded Funds

Exchange-traded funds that track electric vehicles are another possible opportunity for investors. These funds allow investors to purchase shares in funds that track electric vehicle industry development. Investments are spread across multiple companies, reducing investment risk and offering returns similar to the average returns of the entire sector. ETFs track gains and losses of stock indexes and are traded directly on the stock market in a means similar to stock trading. Just as in traditional stock trading, stop-loss limits may be placed, and dividends are paid to brokerage accounts.

Significant ETFs that include electric vehicle stock and supplier stock include QCLN and LIT. The First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN) has Tesla among its holdings and includes other companies with green technology offerings. Global X Lithium (LIT) tracks lithium suppliers and battery companies. This fund's most significant holdings include FMC Corporation, Avalon Rare Metals Incorporated, and Rockwood.