On 21/9, CNBC reported that Berkshire Hathaway Energy, a subsidiary of Berkshire that held shares in the Chinese electric vehicle maker BYD, reported a value of 0 for this investment as of 31/3. A Berkshire spokesperson later confirmed the conglomerate had completely divested from BYD.
Berkshire Hathaway, the investment company of billionaire Warren Buffett, initially invested in the Chinese electric vehicle company in 2008 at the suggestion of Charlie Munger, former Vice Chairman of Berkshire Hathaway. They paid $230 million for 225 million shares, representing a 10% stake.
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BYD's booth at the Munich Motor Show. Photo: Reuters |
BYD's booth at the Munich Motor Show. Photo: Reuters
Buffett had previously praised BYD founder Wang Chuanfu and visited the company's factory in China in 2010. At the 2023 annual shareholders' meeting of the publishing company Daily Journal, Munger commented that at Berkshire, he had "never done anything as good as the BYD investment".
However, in 2022, Buffett's conglomerate began selling after BYD's stock price increased more than 20 times. By June of last year, they had sold nearly 76% of their holdings, reducing Berkshire's stake to less than 5% – a level that does not require disclosure of transactions with BYD stock under Hong Kong stock exchange regulations. At that time, they owned 54 million shares.
Billionaire Warren Buffett has never fully explained why his conglomerate sold its BYD shares. In 2023, he said the Chinese electric vehicle company was an "extraordinary company" run by an "extraordinary person." However, he stated that Berkshire would "find better uses for the proceeds." Around the same time, the conglomerate also sold almost all of its stake in the Taiwanese chipmaker TSMC, worth approximately $4 billion, just months after buying in.
Berkshire's portfolio is primarily focused on the U.S. market. At the 2024 annual shareholders' meeting, Buffett stated that they were still pursuing this strategy, with BYD being an exception. Currently, their largest investments are in Apple, worth approximately $68 billion, followed by American Express, Bank of America, and Coca-Cola.
BYD was founded in 1995 by chemistry graduate Wang Chuanfu, initially producing batteries. They started manufacturing gasoline-powered vehicles in 2005 and entered the electric vehicle market in 2010. BYD is currently the world's largest electric vehicle manufacturer.
Ha Thu (CNBC, Reuters)
