Norway's $1.5 trillion wealth fund, known as the Norges Bank Investment Management (NBIM), has reportedly boosted its holdings in electric vehicle makers Tesla and BYD in 2023, according to a recent report from Bloomberg News. This development comes as a surprise to some, considering the fund's previous call for Tesla to sign a collective agreement with a trade union.

By the end of 2023, Tesla had become the 11th largest holding in the NBIM's portfolio, with its stake rising to 0.98%, equivalent to approximately $7.7 billion. This marked an increase from the previous year, where the fund held a 0.87% stake in the electric vehicle manufacturer.

Similarly, BYD, which overtook Tesla as the world's largest electric car company in late 2023, also saw increased investments from Norway's wealth fund. The NBIM's stake in BYD reached 0.57% by the end of the year, compared to a 0.38% stake in the previous year.

Established in the 1990s to manage Norway's oil and gas wealth abroad, the Norges Bank Investment Management follows a benchmark index based on a framework set by the parliament. The fund's 2023 results are expected to be released on Tuesday.

The NBIM has historically supported Tesla's potential unionization and has been an advocate for employee rights. In 2022, the fund backed a shareholder proposal aimed at introducing a policy that would respect employees' right to organize. Unfortunately, the proposal was ultimately rejected.

Despite the increased investments from Norway's wealth fund, Tesla has encountered challenges in 2024. The company recently narrowly missed earnings estimates, and it has announced that its volume growth for this year will be notably lower as it prioritizes its next-generation vehicle platform. As a result, Tesla's stock has dropped 23% since the start of the year.

It remains to be seen whether the NBIM will continue to encourage Tesla to secure a collective agreement with IF Metall, a trade union in Sweden. As the fund's support for Tesla's unionization efforts has been evident in the past, this may pose an interesting development to monitor in the future.

Overall, the increased investments by Norway's wealth fund in Tesla and BYD showcase the fund's ongoing interest and confidence in the electric vehicle industry. It also highlights the significance of these companies in shaping the future of sustainable transportation.