Berkshire Hathaway's Profitable Bet on BYD: A Legacy of Vision and Growth

In a landmark investment sixteen years ago, Warren Buffett's Berkshire Hathaway committed $230 million to Chinese electric vehicle startup BYD, a move that raised eyebrows given the company's early-stage technology focus. This investment has since proven to be one of Berkshire's most lucrative, with the stake peaking at $8 billion as the electric vehicle market surged in China and globally. Recently, Berkshire has begun to reduce its holdings, capitalizing on the substantial profits earned during BYD's rapid growth phase. The late Charlie Munger, Berkshire's vice chairman who passed away in November at age 99, held BYD founder Wang Chuanfu in high regard, likening his ingenuity to that of Thomas Edison and Bill Gates. Munger emphasized that BYD was not merely an early-stage venture but a remarkable success story. He highlighted the company's evolution from manufacturing mobile phone batteries in the 1990s to becoming a leading automobile manufacturer by 2003, ultimately establishing itself as the top car brand in China. In a significant milestone, BYD surpassed Tesla in the fourth quarter of 2023, becoming the world's leading electric vehicle maker by selling more battery-powered vehicles than its American rival. Munger's introduction to BYD came through his friend Li Lu, who had previously invested in the company for Munger's family portfolio, showcasing Munger's long-standing belief in China's economic potential. Munger's insights into the competitive landscape of the global market reflect his admiration for China's rapid growth, underscoring the strategic foresight that characterized Berkshire Hathaway's investment in BYD.