Warren Buffett exits totally from BYD

Warren Buffett’s Berkshire Hathaway reportedly divested all its investments in BYD, the Chinese No. 1 automaker which is reportedly facing a slowdown.

Berkshire started investing in BYD in 2008 when Buffett’s late close friend recommended to him to splash US$230-million to acquire 225 million shares valued then at 8 HKD (US$1.03) per share. That share surge 3,890% in the last 17 years until Berkshire totally close its investment.

The Buffett divestment started in August 2022 by decreasing its stake from 20.04% to 19.92%.  The selling continued through the next three years, as in 2024 Berkshire reduced its stake to under 5%, resulting in no longer being required to disclose its stake in the company.

Although reported only this month, the total divestment by Berkshire was held las March 31 to its 17-year China EV story book.

According to reports emanating from China, BYD is “currently in the middle of a fierce price war and over-competition in China. It launched or relaunched three new brands in the last year (Denza, Fang Cheng Bao, and Yangwang) to move its portfolio upmarket; however, its sales started to stagnate in the previous two months after years of uninterrupted growth.”

The report further said that “inn July, BYD sold 341,030 passenger vehicles globally, up only 0.1% from last year. In August, the company sold 371,501 cars, up only 0.2% from last year. This is the lowest year-over-year growth since January 2021.”

BYD, quoting several reports, “has internally reduced its previously announced annual sales target of 5.5 million to 4.6 million for 2025 while between January and August, BYD sold 2,830,415 passenger vehicles globally.”