If you’re ready to trade or invest in electric cars, follow these steps:
1. Choose whether to trade or invest
Learn about the differences between spread bets, CFDs, and share dealing.
2. Identify a stock or ETF through your own analysis
Carry out your own technical and fundamental analysis to identify a stock or ETF that you’d like to take a position on.
Or, if you want more info before you start trading or investing in electric vehicles, here’s our full guide:
5 steps to trading or investing in electric vehicles
Learn about the electric vehicle industry
The electric vehicle (EV) industry is dedicated to the research, development and production of electric alternatives to vehicles with internal combustion engines. Many people claim that EVs are more environmentally friendly because they rely on lithium-ion batteries rather than fossil fuels.
Because of the growing interest in the electric vehicle industry – and the gradual phasing out of cars that run on fossil fuels – some sources state that lithium demand is set to triple by 2025, with demand for electric vehicle batteries possibly even overtaking the global lithium supply.
This means that the metal itself or the mining companies that produce it could be good opportunities to get indirect exposure to any future growth in the electric vehicle industry. That’s because more electric cars on the road equates to a higher demand for the materials in their batteries.
Discover why people trade or invest in electric cars
People trade or invest in electric cars to get exposure to an industry that is dubbed to expand significantly in the 2020s. Outsiders like Tesla (TSLA) have become mainstream, and the economies of scale will undoubtedly make electric vehicles more accessible to a greater number of customers as more and more companies begin researching, developing and producing electric vehicles.
And, with leaders like US President Joe Biden announcing that they’re replacing government fleets with electric vehicles, and car companies like Jaguar stating that they’ll be entirely electric by 2025, you can see why people are starting to wonder about trading or investing in the electric vehicle industry.
Electric vehicles are one of several thematic investing opportunities that’ve gained popularity in recent years – and people are interested to see exactly what this industry has in store. Other thematic opportunities include water, 5G and artificial intelligence.
Decide which electric vehicle asset you want to take a position on
- Stocks give you exposure to the share price movements of companies that are directly involved in the electric vehicle sector like Tesla, or indirectly like lithium producers
- ETFs are a basket of different securities – often the shares of multiple companies – that will give you broad exposure to the electric vehicle sector
Speculate on stock prices rising or falling with spread bets or CFDs.
Buy the stocks outright and benefit from any upward movement in their price.
Speculate on ETF prices rising or falling with spread bets or CFDs.
Buy shares in an ETF outright and benefit from any upward movement in the ETF’s price.
- Electric vehicle stocks live market prices
- Electric vehicle ETFs live market prices
Choose whether to trade or invest in electric vehicles
|Markets||Electric vehicle shares and ETFs||Electric vehicle shares and ETFs|
|Method||Trading derivatives like spread bets or CFDs||Investing with a share dealing account, ISA or IG Smart Portfolio|
|Time frame||Short to medium term||Medium to long term|
|Initial capital required||Deposit (margin)||Full value of investment|
|Returns||Profit from long and short positions||From capital appreciation and dividends|
|Cost of trading||Spreads when spread betting, commission when CFD trading. Margin requirements vary||Buy and sell shares and ETFs from zero commission for US shares and £3 commission for UK shares2|
|Tax benefits||Spread bets are tax free, and both spread bets and CFDs are free from stamp duty3||IG ISAs aren’t subject to capital gains tax (CGT) or income tax3|
|Risk||Leverage can magnify both your profits and losses as they’ll be based on the full exposure of the trade, not just the margin required to open it. This means losses as well as profits could far outweigh your margin, so always ensure you’re trading within your means.||Limited to the initial outlay|
|Style||Day trading, swing trading, trend trading and position trading||Passive and active investing|
Trading vs investing in detail
Trading and investing are similar terms that are sometimes used interchangeably. But, we like to be clear about the distinct differences between them.
‘Trading’ means that you’re speculating on the price of something rising or falling using derivatives. With us, the derivatives you’ll be using are spread bets or CFDs – and you can use them to take a position on electric vehicle company shares or ETFs, without owning them directly.
These are leveraged products, which means they enable you to get full market exposure for an initial deposit – known as margin. But, while leverage can increase your profits, it can also increase your losses.
‘Investing’ means that you’re taking direct ownership of something to benefit from prices rising. You’ll be able to invest in the shares of individual companies that are producing electric vehicles, or in ETFs.
Leverage isn’t available for investments, so you’ll need to commit the full cost of the position upfront, which could increase your initial cost. But, this also caps your maximum risk at the opening cost of your position.
Here are our best commission rates for share dealing clients compared to those of our competitors:
|IG||Hargreaves Lansdown||AJ Bell|
|Best commission rate on US shares||Free||£5.95||£9.95|
|Standard commission rate on US shares||£10||£11.95||£9.95|
|FX conversion fee||0.5%||1.0%||1.0%|
|Best commission rate on UK shares||£3||£5.95||£4.95|
|Standard commission rate on UK shares||£8||£11.95||£9.95|
|How to qualify for the best rate||Open 3+ or positions in the previous month||20 or more trades in prior month||n/a|
Identify an opportunity through your own analysis
Analysis can be either technical or fundamental, and you should use both to inform your decision making before you open a position.
- Technical analysis looks at chart patterns, technical indicators and historical price action
- Fundamental analysis is based on the fundamentals of a company, including its net revenue and profit and loss statements
Interested in analysis? Find out more at IG Academy
Pick your platform and place your electric vehicle trade or investment
We’ve got an award-winning trading platform4 – available on desktop or on-the-go with our mobile app. You’ll be able to search for your next electric vehicle opportunity directly from our platform’s search function. We’ve also got in-platform news and analysis from our in-house team of experts and Reuters newsfeeds.
Step-by-step guide to making an electric vehicle stocks or ETFs trade
Here’s a screenshot of our trading platform, with some steps that take you through how to open a spread bet or CFD position.
- Search for and select your opportunity
- Choose ‘buy’ to go long or ‘sell’ to go short
- Put in your position size
- Set your stops or limits to help manage your risk
- Place your deal and monitor your position
Step-by-step guide to making an electric vehicle stocks or ETFs investment
Here’s a screenshot of our investment platform, with some steps that take you through how to open an investment position.
- Search for and select your opportunity
- Choose ‘buy’ to open your investment
- Put in the quantity
- Set your order type
- Place your deal and monitor your position
When you’re ready to place your electric vehicle trade or investment, make sure that you familiarise yourself with the range of risk management tools that we offer – like the stops and limits that you can access from our platform’s deal ticket.
Risk management is important, especially with spread bets or CFDs because you’ll be using leverage to open your positions – which can increase both your profits and your losses.
We’ve also got educational resources like IG Academy, with free courses on how to analyse the markets and get the most out of your trading. If you’re not ready to trade the live markets yet, maybe you’ll want to try our demo account – which gives you £10,000 in virtual money to build your confidence in a risk-free environment.
1 Based on revenue (published financial statements, 2022).
2 Our best share dealing commissions apply to clients who opened three or more positions on their share dealing account in the previous month.
3 Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.
4 Best trading platform as awarded at the ADVFN International Financial Awards and Professional Trader Awards 2019. Best trading app as awarded at the ADVFN International Financial Awards 2020.