iShares Self-Driving EV and Tech ETF

IDRV

Market cap $166M

The global electric vehicle market remains highly competitive, with China as the dominant region and the U.S. seeing a temporary Q3 boost from expiring tax credits. BYD Company Limited leads in global EV sales but saw a rare year-over-year decline in Q3, mainly due to intense competition in China, though exports are surging. Xiaomi is emerging as a standout, rapidly scaling EV sales and maintaining strong momentum despite being a newcomer and not an EV pure-play.

iShares Self-Driving EV and Tech ETF offers broad exposure to electric vehicles and battery technologies but limited self-driving tech representation. IDRV's holdings include a mix of established and emerging EV makers, battery suppliers, and lithium producers, but many face significant uncertainties and financial risks. While the EV and self-driving sectors have strong long-term growth prospects, IDRV lacks key industry leaders like Alphabet, Amazon, Uber, and Nvidia.

With nearly 70% of global rare earth production and more than 90% of processing taking place in China, the world remains heavily reliant on the country for rare earth element supplies. Rare earth elements are a group of 17 minerals, including neodymium, dysprosium and lanthanum, which are used for various applications.

Explore these ETFs as the potential removal of the EV tax credit is expected to impact the U.S. EV market significantly.

The iShares Self-Driving EV and Tech ETF offers a cost-effective way to invest in global companies advancing self-driving tech and electric vehicles. IDRV's holdings include Tesla, Li Auto, Arcadium Lithium, XPeng, and BYD, providing a comprehensive view of the EV sector and supply chain. The fund's sector allocation focuses on Consumer Discretionary, Industrials, Materials, and Information Technology, with significant investments in Chinese firms.

Following the recent surge in EV sales and decreasing prices which make EVs more affordable, investing in EV ETFs with a long-term horizon becomes appealing.

The iShares Self-Driving EV and Tech ETF tracks companies in the EV and tech sectors, focusing on electric vehicles, batteries, and related technologies across 40+ countries. Solid-state batteries and ADAS technology are key industry trends, enhancing EV range, energy density, and safety. Risks include sustainable charging, safety, system failures, and infrastructure readiness; however, the global self-driving EV market is growing at 36% annually.

As an ex-future mobility research analyst, I spent a lot of time looking at financial statements and there was very little to see. New entrants in the space had no revenues (and if they had revenues then they had no profitability) and there was very little proof that they would hit their targets.

iShares Self-Driving EV and Tech ETF is a hold due to challenges in the autonomous vehicle industry, lack of U.S. large tech companies, and risk of import tariffs. The Fund is globally diversified with even weights on U.S., European, and Asian companies, but lacks well-established U.S. large tech companies. Performance, expenses, and dividends of IDRV compared to peer funds show suboptimal returns despite a lower expense ratio and growing dividend yield.

Concerns about “overcapacity” arise primarily for goods linked to high-wage jobs, not for low-wage industries like clothing or toys. China sees its success as a result of a system that blends state coordination with market forces.