General Industry Update

While the electric vehicle (EV) industry in North America may continue to face near-term headwinds in the early months of the year, the same isn’t necessarily true elsewhere in the world.¹ The experience of other countries and jurisdictions globally could offer the United States and Canada ideas on a path forward to an all-EV future.

As highlighted in a recent CNBC documentary, Norway leads the world in electric vehicle (EV) adoption, with 82% of new car sales being electric cars in 2023. In contrast, the U.S. saw only 7.6% EV sales; in China, the figure stood at 24%. The Norwegian Ministry of Climate and Environment aims for all new cars to be zero-emission by 2025. Since the 1990s, Norway has incentivized EV purchases with benefits like free parking, bus lane access, toll exemptions, and zero taxes on EVs. Tesla and other EV models, available for about a decade, sparked a surge in sales. Oslo, the capital of Norway, is transitioning its transportation, including ferries, buses, trucks, and construction equipment, to electric. Charging infrastructure is replacing gas pumps and parking meters. Norway’s abundant hydropower sustains its electric grid, making EVs cheaper and more sustainable than gasoline vehicles.²

Likewise, in China, there continue to be EV success stories. Xpeng, a Chinese electric vehicle manufacturer, plans to expand aggressively, hiring 4,000 new employees and investing 3.5 billion Chinese yuan ($486.2 million) this year in artificial intelligence technology. The company’s driver assistance system, Xpilot, enables semi-autonomous functionality in its vehicles. In a letter to employees, CEO He Xiaopeng outlined plans for Xpeng to launch approximately 30 new or upgraded vehicles over the next three years, all of which would benefit from AI-enabled advances to Xpilot.

Xpeng also aims to broaden its market presence by introducing models in price segments above 300,000 yuan and at 150,000 yuan this year. The strategic moves reflect Xpeng’s ambitious growth strategy amidst fierce competition in the Chinese EV sector, which Xiaopeng said could lead to a “knockout round” soon within the industry and one for which he saw Xpeng well-positioned to survive.³

Company Specific Updates

Li Auto Inc

Li Auto Inc., a prominent player in China’s new energy vehicle market, disclosed its unaudited financial results for Q4 2023 and the full year ended December 31, 2023. In Q4 2023, the company reported a record-high quarterly revenue of $5.88 billion, marking a 136.4% increase from the same period in 2022. Vehicle sales for the quarter surged to $5.69 billion, reflecting a remarkable 133.8% year-on-year increase. Gross profit reached $1.38 billion, with a gross margin of 23.5%, up from 20.2% in Q4 2022. Operating expenses rose to $950.8 million, while income from operations reached $427.7 million. Notably, Li Auto reported a significant net income of $810.2 million for Q4 2023, marking a staggering 2,068.2% increase from Q4 2022. The company attributed its success to robust sales, expansion of retail stores, and improved vehicle margins. As of December 31, 2023, Li Auto operated 467 retail stores across 140 cities, along with 360 servicing centers and authorized body and paint shops in 209 cities.⁴

Source Image: SI Auto – LI One Model

Additionally, the company announced it delivered 20,251 vehicles in February 2024, up 21.8% from the same period last year. These figures come even in the face of widespread holidays during the Chinese New Year and with some trims of the Li L series models sold out.⁵

Tesla Inc

Tesla disclosed in its annual filing that it amassed $1.79 billion in revenue from regulatory credits in the past year, bringing its total earnings from such credits since 2009 to nearly $9 billion. These credits are earned through Tesla’s production and sale of electric vehicles, then sold to automakers surpassing emissions limits in regions like China, the European Union, and California. Notably, Tesla incurs minimal additional costs in obtaining these credits, resulting in almost pure profit from their sale.

Source: Photo: Unsplash

Despite previous expectations of diminishing returns, Tesla’s regulatory credit revenue has remained lucrative, with $1.58 billion generated in 2020 and over $1.7 billion each in the last two years. Other automakers like Volkswagen AG and General Motors Co. have struggled to meet their EV targets, relying on regulatory credit purchases to comply with emissions standards. As emissions regulations tighten, particularly in Europe and the U.K., the demand for such credits is expected to persist, offering Tesla a stable revenue stream from this auxiliary business.⁶

CARS ETF: Investing in Future Cars, Driving Our World Forward

The auto industry is undergoing the biggest transformation in generations and there is a growing demand for ways to invest in this industry.

The Evolve Automobile Innovation Index Fund (CARS ETF), is Canada’s first automobile innovation ETF. CARS takes a diversified approach to invest in the development of electric cars, self-driving cars, and automobile innovation, including in some of the world’s leading manufacturers and automobile companies. CARS is a great way to gain access to the future of the automobile and shift your investments into gear.

For more information on the Evolve Automobile Innovation Index Fund or any of Evolve ETF’s lineup of exchange-traded funds, please visit our website or contact

Portfolio Strategy and Activity

For the month, Li Auto Inc made the largest contribution to the Fund, followed by GS Yuasa Corporation and Nvidia Corp. The largest detractors to performance for the month were AMS Osram AG, followed by Plug Power Inc and Fluence Energy Inc.



  1. “EV demand slowdown hits automakers, suppliers,” Automotive News Europe, January 31, 2024;
  2. Pettitt, J., “What the U.S. can learn from Norway when it comes to EV adoption,” CNBC, February 17, 2024;
  3. Kharpal, A., “Xpeng plans to hire 4,000 people, invest in AI as CEO warns intense EV rivalry may end in ‘bloodbath’,” CNBC, February 19, 2024;
  4. “Li Auto Inc. Announces Unaudited Fourth Quarter and Full Year 2023 Financial Results,” Li Auto, February 26, 2024;
  5. “Li Auto Inc. February 2024 Delivery Update,” Li Auto, February 29, 2024;
  6. Trudell, C., “Tesla Rakes In $9 Billion From Carmakers Failing to Sell Enough EVs,” Bloomberg, February 9, 2024;

Header image source: Getty Images Credit: xia yuan

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.
Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.
Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Tags cars etf  electric cars  electric vehicles  li auto  Tesla  xpeng