The electrified transportation sector has surpassed renewable energy as the top green investment category, reaching $634 billion in 2023—a 36% year-on-year increase. With transportation contributing one-fifth of global carbon emissions, EVs are leading the transition to sustainable mobility, supported by significant regulatory frameworks including the EU’s ban on ICE vehicle sales by 2035 and the US Inflation Reduction Act.

Despite robust growth (18% of global car sales in 2023 were electric), the industry faces substantial challenges. Supply chain issues include dependency on critical minerals like lithium and cobalt, with concerns about mining conditions and Chinese dominance of refined materials. Manufacturing bottlenecks, semiconductor shortages, and declining government subsidies have created market variability across regions, with Europe experiencing a slowdown while China dominates with domestic manufacturers.

Investment opportunities span electric vehicles, charging infrastructure, battery technology, and mineral supply chains. Tesla’s Gigafactories exemplify successful large-scale infrastructure investment, generating $17.1 billion in economic output since 2014. Key investors include institutional investors, private equity firms, asset managers, and corporations, with firms like BlackRock and Vanguard investing across the EV ecosystem.

Projections indicate EVs will achieve 100% of new passenger vehicle sales by 2034, with the entire on-road fleet expected to electrify by 2046, though technological innovation in battery technology and charging infrastructure remains critical.