The electric vehicle, or EV, market is growing substantially in recent years and it’s anticipated to continue its rise over the next decade and beyond. As government regulations limiting carbon emissions increase, automakers happen to be made to shift their focus on electric cars.

Many companies are vying to get a piece of the EV market, in the automakers themselves to those that supply parts and components used in EVs. The potential for growth makes the EV industry attractive to investors, but success is a lot from guaranteed.

Purchasing electric vehicles: Precisely what does the market seem like?
The electrical vehicle market has exploded significantly in the last decade. This year, only 120,000 electric vehicles were sold globally, in line with the International Energy Agency. In 2021, global EV sales reached 6.6 000 0000 vehicles. Recent growth has largely been driven by China, which included 3.3 million EV sales in 2021, over were purchased from the whole world in 2020.

Purchasing electric vehicles
Top 5 EV companies:

Tesla (TSLA)
Ford (F)
Gm (GM)
Volkswagen (VWAGY)
Nissan (NSANY)

All five of these companies offer electric vehicles, with Tesla to be the clear market leader. Tesla held a 64 percent market share of EV sales throughout the third quarter of 2022, according to Prizes. Its Model 3 and Y vehicles combine to take into account nearly Sixty percent of EV sales within the U.S.

Tesla is unique because it targets electric vehicles exclusively, whereas other automakers like Ford and Gm still produce gas-powered vehicles. These legacy manufacturers are looking to increase their output of EV vehicles within the future years to meet up with regulatory requirements and capitalize on growing interest in EVs.

Other EV manufacturers include Rivian Automotive (RIVN), NIO (NIO), Li Auto (LI) and Nikola (NKLA).

While the risk of future growth is of interest to investors, the EV companies are not without risks. High-growth industries often attract tons of competition that could hurt the returns investors ultimately earn. Share prices may also be overpriced in exciting new industries, causing investors to overpay for growth that could or might not exactly materialize. Be sure you understand the companies you’re buying before you make a purchase, or consider choosing a diversified portfolio available using an electric vehicle ETF.

Another way to put money into the EV information mill to spotlight companies that produce a number of different EV makers, which means you don’t ought to predict which manufacturer could be the ultimate champion. Companies like BorgWarner and Aptiv supply different components utilized in EVs, while BYD produces rechargeable batteries along with making EVs themselves. Albemarle, conversely, is really a specialty chemicals company which causes lithium compounds utilized in lithium batteries, which can be utilized in EVs, among other products. These businesses should see their sales stuck just using EVs grow because the overall a higher level interest in EVs continues to increase.

Similar to the pure EV makers, suppliers to EV companies could get bid up to prices that make it difficult for investors to earn attractive returns. Growth doesn’t always materialize you’d like investors hope and there can be bumps inside the road. Shortages that lead to expensive for components today can shift to periods of oversupply and falling prices.

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