General Industry Update

June saw another round of tariffs imposed on Chinese EV makers as trade friction between China and G7 countries around electric cars continues to grow.

The European Union announced new tariffs on electric vehicles imported from China beginning in July. Tariffs on Chinese-made EVs will rise to as much as 48%, targeting major players such as BYD (held by the Fund), Geely, and SAIC, which owns the MG brand. The tariffs were imposed after a European Commission investigation accused Chinese subsidies for EVs of being “excessive” and “unfair.”

The tariffs will likely cut Chinese EV imports to Europe by a quarter, and Chinese EV prices in Europe could rise by 15% to 30%. Despite this, however, analysts believe these tariffs will merely slow, but not halt, China’s EV push into Europe, with some likening the measures to a “speeding ticket” for Chinese firms.

Volkswagen and BMW expressed concerns about the tariffs, warning of potential retaliatory measures that could harm European exports to China. Mercedes-Benz, with significant sales in China, also opposed the tariffs, stressing the importance of open markets.¹

In a parallel move, Canada is also tightening restrictions on Chinese electric car imports as the Trudeau government seeks to align itself with the Biden administration on trade. The federal government announced a 30-day public consultation, the first step toward imposing tariffs on Chinese EVs.²

This move by Canada—which would keep the cost of Chinese-made EVS high—comes despite warnings from other automakers that Canada is in danger of not meeting the government’s target of phasing out new gasoline-powered vehicles by 2035. The automakers cite the lack of affordability, as well as range needs and adequate charging infrastructure as key stumbling blocks to more widespread EV adoption in Canada.³

Company Specific Updates

Rivian Automotive Inc

Rivian Automotive announced in June that Volkswagen Group will invest $5 billion in its business, beginning with an initial $1 billion investment. This initial funding, structured as a convertible note, could convert into Rivian shares after December 1. An additional $4 billion will be invested by 2026 as a joint venture supporting both electrical architecture and software development.

Rivian shares surged over 50% in after-hours trading following the announcement, providing a significant boost to the EV maker, which has seen its stock decline by roughly 49% this year. The investment is expected to help Rivian become cash flow-positive and support the ramp-up of production of Rivian’s new R2 SUVs in Illinois and a midsize EV in Georgia. Rivian CEO RJ Scaringe emphasized the importance of this deal, focusing on vertical integration and advanced software platforms.

This strategic move highlights the shifting dynamics in the EV market, with Volkswagen becoming the second legacy automaker to invest in Rivian, following Ford’s exit in 2023. Rivian continues its cost-cutting measures, including pausing construction in Georgia, to optimize resources and focus on efficient production.⁴

Nvidia Corp

Nvidia continues to make significant inroads in the electric vehicle space. In June, Tesla CEO Elon Musk announced that the EV maker expected to spend $3 billion to $4 billion on Nvidia hardware this year. Musk highlighted that Nvidia hardware accounts for about two-thirds of the cost of building Tesla’s AI training superclusters.⁵

Likewise, Rivian Automotive also announced that its revamped all-electric R1 pickup and SUV models will feature ten times the computing power of its previous vehicles thanks to the incorporation of Nvidia chips, in addition to enhancements in range and performance. Central to this upgrade are dual Nvidia DRIVE Orin processors, powering the “Autonomy Compute Module” with advanced driver-assistant features.⁶

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Portfolio Strategy and Activity

For the month, Rivian Automotive Inc made the largest contribution to the Fund, followed by Nvidia Corp and Cirrus Logic Inc. The largest detractors to performance for the month were Fluence Energy Inc, followed by Bloom Energy Corporation and Alfen N.V.



  1. Nardelli, A., Valero, G., & Torsoli, A., “EU Tariffs on China EVs to Reach as High as 48% With New Levies,” Bloomberg, June 12, 2024;
  2. Platt, B. & Mulima, M., “Canada to Curb China EV Imports as Trudeau Responds to Biden Move,” Bloomberg, June 24, 2024;
  3. Mulima, M., “Canada Can’t Meet Goal of 100% EV Sales by 2035, Automakers Say,” Bloomberg, June 19, 2024;
  4. Wayland, M., “Rivian secures up to $5 billion from Volkswagen, shares soar more than 50%,” CNBC, June 25, 2024;
  5. Kachwala, Z., “Tesla likely to spend $3 bln-$4 bln on Nvidia hardware this year,” Reuters, June 4, 2024;
  6. Wayland, M., “Rivian redesigns all-electric R1 pickup and SUV, adds Nvidia chips and improves performance,” CNBC, June 6, 2024;

Header image source: Getty Images Credit: Koiguo

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