Italy overtook Germany as Europe’s largest market for diesel cars during the first half of 2018 with diesel car sales down by 6%. In Germany the market for diesel cars contracted by a fifth during the same period. The market for diesel cars in the UK all but collapsed during the first six months of 2018, sales were down by 30% and only Norway saw a larger decline. The UK slipped to fourth largest diesel car market in Europe. France moved into third despite diesel sales declining by 12%.
In Spain and Belgium, diesel car sales were down by around a fifth. The contraction was less pronounced in Sweden, Portugal and Poland. However, the Swedish car market is likely to contract sharply during the third quarter of 2018 – a large change in taxation on non-electric cars from July brought many purchases forward. (Petrol car sales in Sweden were up 42% during the first half of 2018 and 63% during the second quarter of 2018.)
The move away from diesel cars in Europe is hitting the German manufacturers of larger vehicles hard. Companies such as Mercedes Benz, Audi, BMW, Porsche and VW invested heavily in diesel engine technology and petrol alternatives for larger SUVs. Electric cars have been announced and shown but largely not yet offered for sale.
The recent news that BlackRock has launched an exchange traded fund (ETF) that taps into the growing global emphasis on sustainable energy sources in transportation is therefore not a surprise. It comes at a time when investors are looking to build portfolios that better reflect their personal views regarding Environmental, Social and Governance (ESG) factors.
iShares Electric Vehicles and Driving Technology UCITS ETF (ECAR) seeks to provide exposure to this opportunity, complementing BlackRock’s existing 16 thematic products, and 27-strong range of ESG ETFs aimed at providing investors with choice for building future-proof portfolios and align with their individual long-term goals.
ECAR tracks the STOXX Global Electric Vehicles & Driving Technology index comprising of companies involved in manufacturing, battery suppliers and component producers and has a Total Expense Ratio (TER) of 0.40%.