Warren Buffett’s Berkshire Hathaway cuts its stake in EV giant

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Warren Buffett’s Berkshire Hathaway cuts its stake in EV giant

Warren Buffett’s Berkshire Hathaway cuts its stake in EV giant

When Chinese EV giant BYD broke into the global consciousness, media reports focused on one thing in particular: its backing from Warren Buffett. Berkshire Hathaway invested about $230 million in BYD in 2008, with Buffett’s longtime partner Charlie Munger calling BYD’s founder a “combination of Thomas Edison and Jack Welch.”

But the days of calling BYD a “Buffett-backed” company may soon be coming to a close. 

On July 16, Berkshire Hathaway trimmed its stake in BYD to 4.94%, down from 5.06%, according to a Monday filing on the Hong Kong stock exchange. That drops the U.S. company below the threshold where shareholders have to disclose share sales.

BYD shares fell over 3% in Hong Kong trading on Tuesday, following the disclosure. Shares in the Chinese EV manufacturer are down almost 9% in the past 12 months.

Buffett’s 2008 investment in BYD represented a 10% stake in the company overall, and 28% of its H-shares, or the shares traded in Hong Kong. BYD shares rose about 20-fold between Buffett’s 2008 investment and August 2022, the month which Berkshire first started trimming its BYD stake. Before Monday’s disclosure, the last time the company disclosed its BYD stake was on June 19 when it reduced its stake to 5.99%. 

BYD is now the largest EV producer in mainland China, the world’s largest EV market. It’s also embarking on an aggressive global expansion and is trying to establish a foothold in markets like Europe and Southeast Asia.

The EV maker briefly overtook Tesla as the world’s largest seller of battery electric vehicles in the final quarter of last year, and market research firm Counterpoint Research forecasts that it may be set to overtake its U.S. competitor again this year. 

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