EV & Batteries: The Grid Behind the Wheel

Toyota's scale makes it the clearest lens for reading this theme. The Japanese giant has staked its next decade on solid-state batteries, a bet that the energy density game is far from settled. That's the central tension in EV & Batteries: the automakers get the headlines, but the companies solving the hard physics problems—chemistry, thermal control, charging speed—capture the structural value.

The theme covers 89 companies, and the spread matters. Pure-play EV names like Lucid Group and NIO sit alongside charging infrastructure operators like Blink Charging and grid-scale storage players like Fluence Energy. That breadth means the theme isn't a single directional bet—it's a map of where electrification money flows at each stage of the stack.

Battery Chemistry Is Still Being Decided

The winning cell architecture isn't locked in. Enovix is pushing silicon-anode lithium-ion, a design that raises energy density without the weight penalty of conventional cells. Electrovaya focuses on lithium-ion cells for industrial and fleet applications, where cycle life matters more than peak range. Both are pursuing a different edge than the mainstream, and that's the point—no single chemistry dominates commercial deployment yet.

Toyota is the loudest voice arguing for solid-state, but commercialization timelines keep slipping. Until solid-state ships at volume, the incumbents in lithium-ion chemistry hold the floor. That keeps the materials and component suppliers relevant for longer than the EV hype cycle implies.

The Infrastructure Layer Compounds Quietly

Charging and thermal management don't move markets on earnings day, but they're non-optional. Every EV sold adds demand for charging infrastructure, and that demand is inelastic—the car is useless without it. Blink Charging operates in this space, competing on network density rather than hardware differentiation.

Thermal management is the quieter constraint. Battery packs degrade faster when they run hot or cold, so thermal control systems directly affect vehicle warranty costs and resale value. Modine Manufacturing supplies thermal management components across industrial and EV applications, making it an indirect but real beneficiary of fleet electrification. Flux Power focuses on lithium battery systems for industrial forklifts and ground support equipment—a commercial market where the ROI on electrification is already proven and the replacement cycle is underway.

Fluence Energy, backed by Siemens and AES, operates at the grid-storage end of the stack. As renewable generation grows, grid-scale batteries become load-balancing infrastructure. That business doesn't depend on consumer EV adoption curves—it runs on utility procurement cycles, which are longer and more predictable.

Chinese EV Makers Carry Volume, Not Valuation Premium

NIO and XPENG are building real volume in China, the world's largest EV market by unit sales. Both have invested heavily in battery swap and fast-charge networks, which differentiate them from Western peers on refueling convenience. The challenge is margin—Chinese EV pricing has been driven down by fierce domestic competition, and neither company has demonstrated the path to sustained profitability that justifies a growth premium.

That contrast with the infrastructure layer is instructive. The companies solving enabling problems—storage, charging, thermal control—tend to serve multiple OEM customers and carry less exposure to any single model cycle. The automakers bear the brand and inventory risk. The suppliers collect a toll.

For investors building exposure to electrification, the EV & Batteries theme in the ETF library captures both layers. The argument for staying diversified across the stack is simple: the winning battery chemistry isn't certain, the dominant charging standard keeps shifting, and the OEM landscape will consolidate. The infrastructure underneath all of it gets built regardless.