Why has the BetaShares Electric Vehicles and Future Mobility ETF lost 27% in 2022?

Didn't they tell us electric vehicles are the next big thing?

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Key points

  • The BetaShares Electric Vehicles and Future Mobility ETF is less than a year old
  • But this ETF has taken a painful hit since it was listed last year
  • Why would an electric vehicles ETF be falling in value in 2022?

The BetaShares Electric Vehicles and Future Mobility ETF (ASX: DRIV) is one of the newer exchange-traded funds (ETFs) on the ASX. This fund was first listed on the ASX in December last year. But it's had a rough start.

Since that date, the Betashares Electric Vehicles ETF has dropped from around $12 a unit to the $9.03 it is commanding today (at the time of writing). That puts it down by just over 25% since inception, and a nasty 27% or so in 2022 thus far.

But electric vehicles (EVs) are the future, right? So why is this ETF been so dramatically put on struggle street over its relatively short life?

Well, electric vehicles are certainly making waves right now. According to a report in The Age over the weekend, EVs already make up between 10 and 20% of new car sales in many European countries. In Norway, nearly two-thirds of new cars sold last year were EVs.

We all know that EV sales are rising and are almost certainly going to keep rising, thanks to growing mandates around the world forcing vehicle manufacturers to 'go electric'.

So what gives with the BetaShares Electric Vehicles and Future Mobility ETF?

Why has the BetaShares Electric Vehicles and Future Mobility ETF taken a wrong turn?

Well, it pays to remember that an ETF can only be valued on one thing: the value of the underlying shares the fund holds in its portfolio.

So let's check out what's under the hood of the BetaShares Electric Vehicles ETF.

According to the provider, this ETFs current top five holdings are as follows:

  1. Uber Technologies
  2. Tesla Inc
  3. Paccar Inc
  4. Volkswagen AG
  5. Nio AG

Investors might also recognise some other names there too, such as BYD Co, Volvo AG, Rivian Automotive, and Samsung.

So let's see how this ETF's largest holdings have been faring in 2022 thus far. For a start, Uber shares have lost a painful 27.7% year to date. Tesla shares are down 25.07%, while Paccar is flat. Volkswagen shares have lost more than 18.5%, while Nio has tanked 42.75% (despite rising 8.4% last Friday).

So with so much red ink in the BetaShares Electric Vehicles and Future Mobility ETF share portfolio, it's no wonder this ETF has been struggling over the year so far. Even though a company might be participating in a growth industry, it doesn't mean its share price can't take a meaningful hit.

These kinds of shares will probably need to make a dramatic turnaround if investors in this ETF are to see a reversal of fortune.

The BetaShares Electric Vehicles and Future Mobility ETF charges a management fee of 0.76% per annum.

Motley Fool contributor Sebastian Bowen has positions in Tesla. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended BYD, Nio Inc., Tesla, and Volkswagen AG. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Uber Technologies. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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