Tesla’s Slowing Deliveries Are Stress-Testing EV ETF Design - Global X Autonomous & Electric Vehicles ETF (NASDAQ:DRIV), iShares Self-Driving EV and Tech ETF (ARCA:IDRV)

Core Insights - Tesla Inc has experienced its second consecutive year of declining vehicle deliveries, raising concerns about its position in the electric vehicle (EV) ETF market [1] - Despite Tesla's stock decline, several EV-focused ETFs have gained value, indicating a shift in the performance dynamics of these funds [2][7] Delivery Performance - In 2025, Tesla delivered approximately 1.63 million vehicles, representing a 9% decrease year-over-year, with fourth-quarter deliveries falling significantly below analyst expectations [2] - Following the New Year holiday, Tesla's stock dropped over 2%, contrasting with gains in various EV ETFs [2] ETF Dynamics - EV ETFs are increasingly capturing a broader range of global EV factors, moving beyond being mere proxies for Tesla [3] - The leadership in the electric vehicle market is diversifying, with companies like BYD surpassing Tesla as the largest EV seller globally in 2025 [4] Competitive Landscape - Competition from Chinese manufacturers, particularly BYD, has become a significant factor, aided by their size, pricing flexibility, and strong domestic demand [4] - ETFs with global exposure, such as KARS, include investments in Chinese EV makers, which can mitigate weaknesses in U.S.-focused companies like Tesla [4] Policy Influence - U.S.-listed EV ETFs are increasingly influenced by policy changes, such as the end of the federal EV tax credit, which led to demand surges and subsequent slowdowns [5] - This volatility indicates that EV ETFs are now responsive to incentive cycles and regional policy changes rather than solely to technology adoption [5] Tesla's Strategic Shift - Tesla's efforts to redefine itself as an AI and robotics firm add complexity to its narrative, but most EV ETFs focus on revenue from vehicle production and battery manufacturing [6] - Tesla's AI ambitions do not significantly shield EV-themed funds from fluctuations in auto sales and pricing pressures [6] Evolving Investment Landscape - The rise of EV ETFs, despite Tesla's stock decline, suggests a diversification in the EV theme regarding geography, business models, and revenue sources [7] - This evolution may be viewed positively by investors, indicating a broader narrative for EV ETFs even as Tesla faces ongoing challenges [7]