Berkshire Hathaway reduces stake in Chinese EV maker BYD

Berkshire Hathaway, managed by Warren Buffett, has cut its stakes in Chinese EV firm BYD even though the company trumped Tesla to become the biggest global producer of EVs last year. On Monday, the company’s filing with the Hong Kong stock exchange revealed that Berkshire Hathaway disposed 1.3 million to purchase Hong Kong-listed BYD shares for HK$310. It raised 65 billion yen which is approximately 5 million of US dollar, which is equivalent to 39.8 million US dollars. From this transaction, the ownership of Berkshire in BYD’s H-shares reduced from 7.02% to 6.90%.

Berkshire first invested in BYD in 2008, buying nearly 225 million shares at a cost of USD 230 million, which was equal to nearly 10% of the firm at the time. Starting from 2022, Berkshire began to sell shares since the price of BYD skyrocketed more than twenty folds from the price of the stock upon Buffet’s investment; however, it has declined around 30% from this year’s high in June.

The company was able to regain the top spot in selling electric vehicles in April from BYD Auto that was at the top for some time. BYD was brought into Berkshire through Warren Buffet's intervention by Berkshire’s late vice chairman, Charlie Munger. He stressed its importance in the 2023 annual meeting of the Daily Journal and stated that during his twenty-year work in the company he never saw a better investment in Berkshire.

Although most of Berkshire’s investments are within the U.S, Buffett was quick to remark that BYD company was a remarkable and extremely lucrative anomaly. He also remembered Munger’s EXTREMELY bullish stance on BYD and another excellent investment that Munger was a big fan of – Costco.