Driving The Future: Opportunities From The Electric Vehicle & Future Mobility Ecosystem

KARS

12/31/2025

Introduction to KraneShares

About KraneShares

Krane Funds Advisors, LLC is a specialist investment manager focused on China, Climate, and Alternative assets. KraneShares seeks to provide innovative, high conviction, and first to market strategies. The firm was founded in 2013 and manages for institutions and individuals globally. The firm is a signatory of the United Nations-supported Principles for Responsible Investment (UN PRI).

Product Suite

China Thematic Equity

• KWEB - Internet & E-Commerce*
• KURE - Healthcare
• KGRN - Clean Technology
• KSTR - STAR Market*
• KTEC - Hang Seng Tech

China Core Equity

• KBA - MSCI China A 50
• KCAI - China Onshore Alpha Index

Options Income

• KLIP - China Internet & Covered Call
• KWIN - Wahed Short-Term Alternative Income

Managed Futures

• KMLM - Mount Lucas Managed Futures

Global Equity

• KARS - Electric Vehicles & Future Mobility*
• AGIX - Artificial Intelligence & Technology
• KOID - Humanoid & Embodied Intelligence*

EM Equity

• KEMX - MSCI Emerging Markets ex China
• KEMQ - Emerging Markets Consumer Tech
• KPHO - Dragon Capital Vietnam Growth

Levered

• KBAB - 2X Long BABA Daily
• KPDD - 2X Long PDD Daily
• KMLI - 2X Long MELI Daily
• KJD - 2X Long JD Daily
• KBDU - 2X Long BIDU Daily

Carbon

• KRBN - Global Carbon Strategy*
• KEUA - European Carbon Allowance
• KCCA - California Carbon Allowance

Fixed Income

• IVOL - Quadratic Interest Rate Volatility & Inflation Hedge
• BNDD - Quadratic Deflation ETF
• KHYB - Asia High Income USD Bond
• KCSH - Sustainable Ultra Short Duration

US Equity

• KSPY - Hedgeye Hedged Equity
• BUYO - Man Buyout Beta Index
• KVLE - Value Line® Dynamic Dividend Equity

*Strategy also available in UCITS

KraneShares Electric Vehicles & Future Mobility ETF

Investment Strategy:

KARS seeks to measure the performance of Bloomberg Electric Vehicles Index. The fund is designed to track the performance of companies engaged in the production of electric vehicles and/or their components or engaged in other initiatives that may change the future of mobility. The Index includes issuers engaged in the electric vehicle production, autonomous driving, lithium and/or copper production, lithium-ion/lead acid battery production, hydrogen fuel cell manufacturing and/or electric infrastructure businesses.

KARS Features:

• Access to global companies that operate in all areas of new transportation methods, passenger and freight, including electric vehicles, autonomous vehicles, and shared mobility.
• Exposure to companies that lead the development of vehicle connectivity like Internet of Vehicles (IoV) and Intelligent Mobility.
• Exposure to the growth brought on by increased demand for lithium-ion battery and non-ferrous metals like lithium due to electric vehicle adoption.
• Exposure to equities listed in Mainland China, currently the world's largest electric vehicle market.

Future Mobility Sector Highlights:

• 70% of new car sales and over 40% of the global car fleet are projected to be electric by 2040.¹
• The global electric vehicle (EV) market revenue is projected to reach $990 billion by 2029.²
• Global electric car sales were estimated at almost 20 million in 2025, a 25% year-on-year increase from 2024.¹
• Passenger car advanced driver-assistance systems and autonomous driving systems could generate between $300 billion and $400 billion in the passenger car market by 2035.³

1. Lewis, Michelle. "Global EV sales jump 21% in 2025 as Europe surges and the US stalls," Electrek. December 11, 2025.
2. "Electric vehicles – Market Insights," Statista, as of 3/31/2025. Retrieved 12/31/2025.
3. Data from McKinsey & Company as of January 2023. Retrieved 12/31/2025.

The Electric Vehicle (EV) & Future Mobility Ecosystem

	Definition
Vehicles	Electric vehicles (EV) manufacturers are the brands that consumers know and are the largest group in the ecosystem.
Components	EVs often require complex components, especially for sensors if they are at all self-driving, that are made by specialized firms.
Batteries	Adoption of electric vehicles and other new energy vehicles dramatically increases demand for lithium-ion and other types of batteries.
Charging	Electric vehicle adoption requires robust, widespread, and efficient charging stations and infrastructure.
Raw Materials	Adoption of electric vehicles and other new energy vehicles may drive demand for raw materials such as lithium.
Autonomous Driving	Autonomous driving is the new frontier of mobility, improving outcomes and experience.

By the end of 2024, there were nearly 60 million EVs on the world's roads, mostly in China.

Electric Vehicles Globally

Chart showing growth of electric vehicles from 2019 to 2024 across World, China, European Union, and United States. The chart shows that by 2024, global EV numbers reached nearly 60 million, with China having the largest share at approximately 34 million, followed by the European Union at about 10 million, and the United States at about 6 million.

Data from the International Energy Agency (IEA) as of 12/31/2024. Retrieved on 12/31/2025.

By the end of 2040, there could be over 300 million EVs on the road thanks to strong government subsidies and declining costs.

• 70% of new car sales and over 50% of the global car fleet are projected to be electric by 2040.¹
• Government subsidies play a key role in EV adoption rates, and countries with strong subsidy programs, such as China, tend to lead in EV adoption.
• China accounted for over 50% of global EV sales in 2025.¹
• In 2025, 15.3 million electric and new energy vehicles were sold in China, while Europe and the United States combined for 6.8 million.¹
• Rising average mileage per vehicle and lower mileage per trip brought on by ride-sharing platforms may result in electric vehicles becoming more cost-competitive than vehicles with traditional internal combustion engines (ICEs).

Global EV Sales as % of Total Light Vehicle Sales (Projection)²

Chart showing projected growth of global EV sales as percentage of total light vehicle sales:

• 2025 Actual: 23%
• 2030: 28%
• 2035: 43%
• 2040: 55%

1. Data from International Energy Agency (IEA), Bloomberg New Energy Finance, CNEVPost, and KraneShares as of 12/31/2025.
2. Data and projections from International Energy Agency and Bloomberg New Energy Finance as of 12/31/2025.

Electric vehicle batteries reached price parity with internal combustion engines (ICEs) in 2025, which may help encourage voluntary adoption by consumers.

Battery Price vs. ICE Price

Chart showing the decline in average battery prices from 2013 to 2025, compared to ICE parity price:

• 2013: ~$660 per KWh
• 2025: ~$110 per KWh
• Overall decline: -84% from 2013 to 2025
• ICE Parity line shown at approximately $110 per KWh

Data from Macquarie, US Department of Energy and Statista as of 12/31/2025.

Kilowatt-hour (KWh): A measure of energy use equivalent to the consumption of 1,000 watts for 1 hour.

Government policies, mostly in Europe and Asia, could lead to more EV adoption over the coming decade.

China, EU, UK, Japan and South Korea have set 2050/2060* as target dates to be carbon neutral.

Internal Combustion Engine (ICE) phase-out Plan

Country	Ban Announced	ICE Phase Out Date
Canada	2017	2035
China	2017	Pending
France	2017	2035
Israel	2018	2030
Netherlands	2017	2030
Norway	2017	2025
Singapore	2020	2030
Sweden	2018	2030
United Kingdom	2020	2030

Source: International Council on Clean Energy Transportation and Statista as of 12/31/2025. ICE Phase Out Date refers to planned date upon which sales of solely gas-powered vehicles would be prohibited.

Many companies across a diverse array of sectors contribute to making electric and autonomous vehicles possible.

The image shows various companies categorized by their role in the EV ecosystem:

Charging

• Plug Power
• TGood

Entire Vehicle & Component Manufacturers

• BYD
• Tesla
• NIO
• Xiaomi

Raw materials

• Tianqi Lithium
• CMOC

Batteries

• CATL
• Panasonic

Autonomous Driving

• Horizon Robotics
• Aurora

The image illustrates how these different components and companies integrate to create the complete electric vehicle ecosystem.

Battery Cell Pricing Case Study

Raw materials represent nearly two-thirds of a battery's cost, making them a crucial part of the EV supply chain.

Chart showing breakdown of battery cell pricing components in $/kWh:

• Cell Materials: 59
• Labor: 4.7
• Manufacturing: 3.7
• Equipment Dep.: 4.5
• Plant dep.: 1.4
• R&D: 10.5
• Marketing & Sales: 5.3
• Management: 8.4
• Financial: 1.1
• Logistics: 2.3
• Inventory: 0.5
• Tax: 0.5
• Others: 0.5
• Subsidy: 0
• Margin: 5.4
• Total: 107.6

Data from Bloomberg New Energy Finance (NEF) as of 12/31/2024. Retrieved on 12/31/2025.

Autonomous driving is the new frontier of mobility, and it is advancing more rapidly than you might think.

• Over 30 million rides were completed by robotaxis in 2025.
• 90% of new cars on the market are expected to feature some assisted driving features by 2030.
• There is an entire ecosystem of firms building autonomous capabilities for ride hailing platforms and automakers.
• Many of these companies are also involved in providing advanced sensors to the nascent global robotics industry.
• KARS now captures many of these unique companies

Name	Logo	KARS Weight (as of 12/31/2025)	Contribution to Autonomous Systems
Horizon Robotics		2.28%	Advanced Sensors
Aurora Innovation		1.48%	Autonomous systems for long-haul trucking
Nav Info		0.22%	Dynamic mapping for autonomous systems
Pony AI		0.62%	Fully autonomous driving systems
Mobileye Global		0.41%	Advanced driver-assistance systems (ADAS)

Data from KraneShares.

1. Campbell, Harry. "Waymo Surges to 450K Weekly Trips and 14M Rides in 2025," The Driverless Digest. December 12, 2025.; "AI: Baidu Matches Waymo's 250K Weekly Robotaxi Rides in China Push," The Tech Buzz. November 2, 2025.; Tran, Bao. Robotaxis in 2025-2030L Global Expansion And Adoption Trends (Latest Numbers). December 27, 2025.
2. Research and Markets. "ADAS and Autonomous Car Research Report 2025 | 90.4% of Global Car Sales Expected to Have Level 1-4 Automated Driving Features by 2030," Globe Newswire. July 10, 2025.

BYD now outpaces Tesla in total sales and is now the largest electric vehicle maker globally.

Chart showing Tesla vs BYD: Total Sales from 2021-2024 in $ Billions

The chart shows BYD's growth from approximately $35 billion in 2021 to over $100 billion in 2024, surpassing Tesla which grew from about $55 billion in 2021 to just under $100 billion in 2024.

1. Richter, Felix. "BYD Pulls Ahead of Tesla to Become Largest EV Maker," Statista. January 3, 2025.
2. Data from Bloomberg as of 12/31/2024. Retrieved on 12/31/2025.

We believe certain indexes may exclude key components of the global EV supply chain, while others may include companies with little to no direct revenue from EVs.

Company	KARS Status	Note	Weight in KARS	Weight in Solactive Autonomous & Electric Vehicles Index	NYSE FactSet Global Autonomous Driving & Electric Vehicles Index
CATL	Overweight	CATL is the world's largest supplier of EV batteries	3.75%	0.00%	0.00%
Alphabet	Excluded	Alphabet is a global internet company with little revenue from EV and autonomous vehicles.	0.00%	4.09%	0.00%
BYD	Overweight	BYD is the world's largest EV manufacturer.	4.07%	0.94%	3.85%

The Underlying Index includes Bloomberg World Equity Aggregate securities in electric vehicle-related sectors. Bloomberg Intelligence uses a multi-step process—keyword screening, back-testing, and committee review—to finalize composition, with additional checks for controversies and UN Global Compact violations. Index methodology is determined by Bloomberg Intelligence; inclusion does not guarantee future results.

KARS is overweight China, where the most EVs were sold in 2025, compared to other leading EV indexes.

Three pie charts showing country allocation comparison:

KARS

• China: 53%
• United States: 19%
• South Korea: 7%
• Australia: 7%
• Japan: 6%
• Others: 8%

Solactive Autonomous & Electric Vehicles Index

• China: 26%
• United States: 27%
• South Korea: 15%
• Australia: 6%
• Japan: 1%
• Others: 25%

NYSE FactSet Global Autonomous Driving & Electric Vehicles Index

• China: 12%
• United States: 50%
• South Korea: 5%
• Australia: 8%
• Japan: 11%
• Others: 14%

Data from Bloomberg and KraneShares as of 12/31/2025. Please see the end of the presentation for definitions.

1. Lewis, Michelle. "Global EV sales jump 21% in 2025 as Europe surges and the US stalls," Electrek. December 11, 2025.

KARS provides exposure to multiple segments within the electric vehicle ecosystem.

Pie chart showing KARS Industry Breakdown:

• Vehicles: 38%
• Raw Materials: 27%
• Batteries: 14%
• Components: 12%
• Autonomous: 8%
• Charging: 1%

Data from Bloomberg and KraneShares as of 12/31/2025.

Catalysts for EVs & Future Mobility Going Forward

1. Lower rates in the US and major emerging markets
2. Recovery in consumer sentiment and high-ticket consumption activities in China
3. Battery or range innovation and proliferation of chargers
4. Reaching global policy equilibrium; the impact of anti-EV administration in the US is now known.
5. Global cost per KwH potentially falling below cost of ICE after reaching parity last year.

KraneShares Electric Vehicles & Future Mobility Index ETF

Investment Strategy:

KARS is benchmarked to the Bloomberg Electric Vehicles Index, which provides exposure to companies engaged in the production of electric vehicles and/or their components. The Index includes issuers engaged in the electric vehicle production, autonomous driving, shared mobility, lithium and/or copper production, lithium-ion/lead acid batteries, hydrogen fuel cell manufacturing, and electric infrastructure businesses.

Fund Details Data as of 12/31/2025

Primary Exchange	NYSE Arca, Inc.
CUSIP	500767827
ISIN	US5007678270
Total Annual Fund Operating Expense	0.72%
Inception Date	01/18/2018
Distribution Frequency	Annual
Underlying Index	Bloomberg Electric Vehicles Index
Net Assets	$78,416,238
Number of Holdings	83

Top 10 Holdings as of 12/31/2025 (Holdings are subject to change)

Ticker	%
Panasonic Holdings Corporation	6752
BAYERISCHE MOTOREN WERKE AG	BMW
TESLA INC	TSLA
STMICROELECTRONICS NV	STMPA
ALBEMARLE CORP	ALB
BYD CO LTD -A	002594
XIAOMI CORP-CLASS B	1810
CONTEMPORARY AMPEREX TECHN-A	300750
RIVIAN AUTOMOTIVE INC-A	RIVN
CMOC GROUP LTD-A	603993

KARS Performance History as of 12/31/2025:

Cumulative %

	3 Mo	6 Mo	Since Inception
Fund NAV	0.47%	39.83%	39.94%
Closing Price	0.64%	39.26%	39.00%
Underlying Index	0.14%	39.60%	46.26%

Average Annualized %

	1 Yr	3 Yr	5 Yr	Since Inception
Fund NAV	45.45%	3.61%	-3.40%	4.31%
Closing Price	46.04%	3.39%	-3.55%	4.23%
Underlying Index	45.03%	3.90%	-2.74%	4.89%

The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investors shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. For performance data current to the most recent month end, please visit www.kraneshares.com/kars.

The Custom Blended KARS Index consists of the Solactive Electric Vehicles and Future Mobility Index from the inception of the Fund through June 15, 2021 and the Bloomberg Electric Vehicles Total Return Index going forward.

Index returns are for illustrative purposes only. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index.

Important Notes:

Carefully consider the Funds' investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in the Funds' full and summary prospectus, which may be obtained by visiting www.kraneshares.com/kars. Read the prospectus carefully before investing.

Risk Disclosures:

Investing involves risk, including possible loss of principal. There can be no assurance that a Fund will achieve its stated objectives. Indices are unmanaged and do not include the effect of fees. One cannot invest directly in an index.

This information should not be relied upon as research, investment advice, or a recommendation regarding any products, strategies, or any security in particular. This material is strictly for illustrative, educational, or informational purposes and is subject to change. Certain content represents an assessment of the market environment at a specific time and is not intended to be a forecast of future events or a guarantee of future results; material is as of the dates noted and is subject to change without notice.

A-Shares are issued by companies in mainland China and traded on local exchanges. They are available to domestic and certain foreign investors, including QFIs and those participating in Stock Connect Programs like Shanghai-Hong Kong and Shenzhen-Hong Kong. Foreign investments in A-Shares face various regulations and restrictions, including limits on asset repatriation. A-Shares may experience frequent trading halts and illiquidity, which can lead to volatility in the Fund's share price and increased trading halt risks. The Chinese economy is an emerging market, vulnerable to domestic and regional economic and political changes, often showing more volatility than developed markets. Companies face risks from potential government interventions, and the export-driven economy is sensitive to downturns in key trading partners, impacting the Fund. U.S.-China tensions raise concerns over tariffs and trade restrictions, which could harm China's exports and the Fund. China's regulatory standards are less stringent than in the U.S., resulting in limited information about issuers. Tax laws are unclear and subject to change, potentially impacting the Fund and leading to unexpected liabilities for foreign investors. Fluctuations in currency of foreign countries may have an adverse effect to domestic currency values.

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Narrowly focused investments typically exhibit higher volatility. The Fund's assets are expected to be concentrated in a sector, industry, market, or group of concentrations to the extent that the Underlying Index has such concentrations. The securities or futures in that concentration could react similarly to market developments. Thus, the Fund is subject to loss due to adverse occurrences that affect that concentration. In addition to the normal risks associated with investing, investments in smaller companies typically exhibit higher volatility.

ETF shares are bought and sold on an exchange at market price (not NAV) and are not individually redeemed from the Fund. However, shares may be redeemed at NAV directly by certain authorized broker-dealers (Authorized Participants) in very large creation/redemption units. The returns shown do not represent the returns you would receive if you traded shares at other times. Shares may trade at a premium or discount to their NAV in the secondary market. Brokerage commissions will reduce returns. Beginning 12/23/2020, market price returns are based on the official closing price of an ETF share or, if the official closing price isn't available, the midpoint between the national best bid and national best offer ("NBBO") as of the time the ETF calculates the current NAV per share. Prior to that date, market price returns were based on the midpoint between the Bid and Ask price. NAVs are calculated using prices as of 4:00 PM Eastern Time.

The KraneShares ETFs and KFA Funds ETFs are distributed by SEI Investments Distribution Company (SIDCO), 1 Freedom Valley Drive, Oaks, PA 19456, which is not affiliated with Krane Funds Advisors, LLC, the Investment Adviser for the Funds, or any sub-advisers for the Funds.

Index Definitions:

Solactive Autonomous & Electric Vehicles Index:

The Solactive Autonomous & Electric Vehicles Index is an equity index designed to track the price performance of companies that are, or are expected to be, actively involved in the electric vehicle and autonomous driving ecosystem. It includes: Electric vehicle manufacturers, Producers of electric-vehicle components and key materials (such as batteries and relevant raw materials), Companies developing or supplying autonomous-vehicle technologies (sensors, mapping, AI, ADAS, ride-sharing, and connected-transport services). The index is calculated and maintained by Solactive AG, uses free-float market-cap weighting with thematic screening, and is reviewed and reconstituted on a regular schedule (ordinary adjustments twice a year). The Solactive Autonomous & Electric Vehicles Index was launched on April 16, 2018.

NYSE FactSet Global Autonomous Driving & Electric Vehicles Index:

A rules-based equity benchmark designed to track the performance of globally listed companies involved in the development of autonomous driving and electric vehicles, including producers of autonomous or electric vehicles, batteries, and related technologies and components (such as sensors, chips, and software for self-driving systems). The index was launched on January 25, 2019.

Term Definitions:

Global Electric Vehicle (EV) Sales as % of Light Vehicle Sales:

The percentage of light vehicles worldwide that are fully electric. In the auto industry, a light vehicle is generally a road vehicle with a relatively low gross vehicle weight, typically covering passenger cars and smaller trucks/SUVs rather than heavy trucks or buses.