Omaha, Nebraska – Warren Buffett, the renowned investor and CEO of Berkshire Hathaway, made headlines at the company’s Annual Shareholders Meeting in Omaha. During the meeting, it was disclosed that Berkshire Hathaway has been gradually reducing its substantial stake in China’s leading electric vehicle manufacturer, BYD. This decision comes as part of a strategic move by the conglomerate to trim its holdings in BYD, with an additional 1.3 million Hong Kong-listed shares sold for $39.8 million, resulting in the company’s ownership dropping from 7% to 6.9%.
Berkshire Hathaway’s initial investment in BYD dates back to 2008 when it acquired approximately 225 million shares for $230 million. The investment proved to be highly profitable as the electric vehicle market experienced rapid growth in China and globally. In light of BYD’s remarkable performance, with shares skyrocketing nearly 600% to a record high in April 2022, Berkshire Hathaway began selling off half of its holdings in 2022 and 2023.
The late Charlie Munger, vice chairman of Berkshire Hathaway, played a significant role in initiating the investment in BYD. Introduced to the company by his friend Li Lu, founder of Himalaya Capital, Munger’s foresight and strategic decision-making were instrumental in Berkshire Hathaway’s foray into the promising EV market. BYD, initially focused on producing batteries for mobile phones, transitioned to electric vehicles in 2003 and has since emerged as a leading car brand in China, as well as a major manufacturer of EV batteries.
In a notable development, BYD surpassed Tesla in the fourth quarter of 2023 as the world’s top electric vehicle maker, selling a higher number of battery-powered vehicles than its U.S. counterpart. This achievement underscores the rapid evolution and growth of the electric vehicle industry, with BYD’s innovative approach and strategic partnerships driving its success in the market. As Berkshire Hathaway continues to adjust its investments in response to market dynamics, the evolving landscape of the electric vehicle sector poses new opportunities and challenges for industry players.
Overall, Warren Buffett’s conglomerate’s decision to reduce its stake in BYD reflects a calculated approach to portfolio management, aligning its investment strategy with changing market trends and opportunities. With Charlie Munger’s visionary influence shaping key investment decisions, Berkshire Hathaway navigates the complex terrain of the electric vehicle market, adapting its holdings to optimize returns and navigate evolving industry dynamics.