The EV Boom Is Real—But Individual Stocks Are a Trap

Here’s the thing: the global EV market just hit a milestone that matters. The IEA just dropped its World Energy Outlook report, and the numbers are wild—20 million electric cars expected to sell in 2025, up 17.6% from last year. That’s roughly 1 in 4 cars sold worldwide now running on batteries. On the surface, it screams opportunity.

But here’s where most retail investors mess up: they see these numbers and immediately think “Buy Tesla” or “Buy BYD.” Wrong move.

Why Tesla and BYD Are Bleeding Out (Differently)

Tesla’s stuck in a trap. Sure, it’s still the biggest EV name, but the picture is uglier than the headlines suggest. After its first annual delivery decline in 2024, Tesla started 2025 in freefall—double-digit sales drops in Q1 and Q2. The Q3 bounce was just buyers panic-buying before the $7,500 federal tax credit expired. Now it’s back to reality: Chinese automakers are eating Tesla’s lunch with cheaper, feature-packed EVs, and Q4 deliveries are expected to tank again.

Worse? Tesla’s valuation isn’t really about selling cars anymore. It’s priced for autonomous robotaxis and humanoid robots—bets that could take years to pan out. The core EV business? Under serious pressure.

BYD’s story is different but equally messy. The Chinese battery giant went all-in on aggressive pricing to dominate the market, but the strategy backfired. Profit margins got shredded in the price war. Even worse, after explosive growth, BYD’s momentum hit a wall in China as the government cracked down on price dumping and competitors like Xiaomi and Geely circled in. Sales growth that looked unstoppable is now stalling.

The Smart Play: ETFs Over Individual Bets

This is why diversified EV ETFs are the move. You get exposure to the whole ecosystem—EV makers, battery producers, component suppliers, charging infrastructure—without betting your portfolio on whether one company can navigate brutal competition and margin compression.

Here’s what’s worth watching:

DRIV (Global X Autonomous & Electric Vehicles ETF)

• 76 holdings across autonomous tech, EV makers, batteries, and materials (lithium, cobalt)
• Assets: $330M | Top holdings: Tesla (3.22%), Toyota (2.44%)
• YTD performance: +28.5% | Expense ratio: 0.68%

The broad exposure means you’re not betting on Tesla beating Chinese makers—you’re betting on the whole industry.

KARS (KraneShares Electric Vehicles & Future Mobility ETF)

• Wider net: EV production, autonomous driving, shared mobility, battery makers, fuel cells, charging infrastructure
• Assets: $81.8M | Top holdings: Tesla (4.17%), Xpeng (4.05%), Panasonic (3.77%), BYD (3.10%)
• YTD performance: +49% | Expense ratio: 0.72%

This one’s more aggressive and more diversified geographically. The 49% YTD gain shows it’s capturing the global EV wave better than betting on single stocks.

HAIL (State Street SPDR S&P Kensho Smart Mobility ETF)

• 79 holdings in smart transportation tech—more niche play
• Top holdings: Ballard Power (hydrogen fuel cells, 2.60%), Lumentum (battery manufacturing lasers, 2.45%), Garret Motion (e-turbos, 2.28%)
• YTD performance: +19% | Expense ratio: 0.45% (cheapest)

If you want pure infrastructure/component play without direct EV maker exposure.

IDRV (iShares Self-Driving EV and Tech ETF)

• 47 holdings focused on autonomous + EV tech
• Assets: $168.9M | Top holdings: Tesla (4.24%), Xpeng (3.96%)
• YTD performance: +32.6% | Expense ratio: 0.47%

Middle-ground play—smaller portfolio but still diversified.

The Bottom Line

The EV market is absolutely on a growth trajectory. 20 million cars in 2025, decarbonization pressure, emerging market demand—it’s all real. But the winners won’t just be the household names. They’ll be component makers, battery specialists, charging networks, autonomous tech providers. By going with an ETF, you’re not trying to predict which single company survives the bloodbath. You’re just riding the wave.

Individual EV stocks? Risky. The sector? That’s the real bet.