By
Svetlana Soroka
April 18th, 2024
In January 2023, BYD sold 151,341 vehicles, including 71,338 pure electric vehicles. The company has been ranking first in the sales of pure electric vehicles in China for ten consecutive months.
Charlie Munger, the longtime investment partner of Warren Buffett, as well as vice chairman of the famed holding company Berkshire Hathaway Inc (NYSE: BRK.A), has named a major Chinese automaker BYD Co. Ltd (OTC US: BYDDF) as his favorite stock ever. According to Charlie Munger, BYD is doing so well and is so far ahead of the US electric vehicle giant Tesla Inc (NASDAQ: TSLA) in China that “it’s almost ridiculous”.
Speaking at the Daily Journal’s virtual annual meeting on Wednesday, Munger stated:
“Tesla last year reduced its prices in China twice. BYD increased its prices. We are direct competitors. BYD is so much ahead of Tesla in China, it’s almost ridiculous.”
He further added:
“BYD last year made more than $2 billion after taxes in the auto business in China. It’s incredible what’s happened. If you count all the manufacturing space they have in China to make cars, it would amount to a big percentage of the Manhattan island, and nobody had ever heard of them a few years ago.”
In 2022, Tesla saw a 37.1% growth in sales in China, with over 439,770 units sold. The company cut prices on its China models a few times last year in an effort to shore up sales and seems that the initiative helped. As we have reported, the price reductions resulted from Tesla’s low delivery count in December 2021, the lowest in more than 5 months. And that was the first time when Shenzhen-based EV manufacturer BYD surpassed Tesla in global sales of electric vehicles. For comparison, for the first six months of 2022, BYD sold a total of 640,000 vehicles while Tesla sold a total of 564,000 vehicles.
In January 2023, BYD sold 151,341 vehicles, including 71,338 pure electric vehicles. The company has been ranking first in the sales of pure electric vehicles in China for ten consecutive months. Besides, BYD has been actively expanding its presence in international markets in recent years. BYD exported 10,409 pure electric vehicles in January 2023, which marks a significant increase of 31 times year-on-year. It has become the sales champion of pure electric vehicles in Israel and New Zealand.
Berkshire Hathaway’s Investment in BYD
BYD has grown significantly over the past few years and with top investors like Warren Buffett, the company has enough reserve for research to debut its own unique products. Berkshire Hathaway made its first move to acquire BYD shares after the global financial crisis of 2008, stacking up $230 million worth of the stock at the time at an average price of HK$8 ($1.02).
Now, BYD stock is the favorite one of Charlie Munger. When asked if he would prefer Tesla or BYD, Munger said the answer is obvious. Even though Berkshire Hathaway recently sold a part of its BYD shares, Munger has “never helped do anything at Berkshire that was as good as BYD”.
Currently, Berkshire Hathaway owns 153.3 million shares of BYD, which represents a 14% stake.