Electric vehicle (EV) sales have skyrocketed over the past two years amid rising oil prices, growing climate change concerns, and federal tax incentives. Due to the current macro headwinds, oil prices are expected to remain volatile, further motivating consumers’ switch to EVs. EV sales in the U.S. are projected to reach 670,000 in 2022, representing a 37% increase year-over-year. Governments worldwide are encouraging the EV market to meet sustainability goals and achieve policy targets for decarbonization. Furthermore, governments have increased their expenditure on developing charging infrastructure, purchasing subsidies, and other incentives.
The U.S. government is promoting the adoption of electric vehicles by offering up to $7,500 in tax credits for customers purchasing an electric plug-in vehicle. Under the new National Electric Vehicle Infrastructure (NEVI) Formula Program established by President Biden’s bipartisan infrastructure bill passed last fall, nearly $5 billion will be made available to construct an electric vehicle charging network. These initiatives are driving the growth of the electric vehicle industry. Investors’ bullish sentiment surrounding the industry is evident in the Global X Autonomous & Electric Vehicles ETF’s (DRIV) 8.2% gains over the past month.
