Buffett Dumps China BYD EV

"About a year ago, BYD passed Tesla as the world's largest electric vehicle (EV) company. Warren Buffett took a 10% ownership stake in BYD in 2008. It is another example of why Buffett is the world's smartest investor, as the stock is up over 3,800% since he bought in. Recently, Buffett sold the last of the BYD shares he owned."

"BYD's primary reason for success is its share in China, which is the world's largest EV market by far. About 69% of global EV sales are in China, based on late 2024 numbers. BYD tops China's EV sales with about one-third of all unit sales in the country. Tesla ranks third at 6%. The market is extremely crowded. Seven companies have a market share of 2% or more."

"There are about 100 EV brands in China, a number made possible by significant investment from the central government. Going forward, though, the survival rate among these companies will be low. Some of the increase in China's EV sales is based on aggressive discounts. Some Chinese manufacturers take months to pay suppliers because of low cash positions. Even the government has warned that the number of companies and discounting is too high."

"BYD faces problems beyond competition in China. It is in the midst of global expansion. However, some large markets, including the United States, have partially or completely blocked its sales. BYD expects more than half its sales to come from outside China by 2030. The goal may be hard to reach. BYD's early expansion has been into southern Asia. Its next big push has been into Latin America. The BYD Shenzhen, the world's largest car container ship, is used t"

BYD passed Tesla as the world's largest electric vehicle company about a year ago. Berkshire Hathaway Energy acquired a 10% stake in BYD in 2008 for $225 million; the shares rose over 3,800% before Berkshire began selling since 2021 and recently sold the last holdings. China accounts for about 69% of global EV sales, and BYD captures roughly one-third of Chinese unit sales while Tesla holds around 6%. The Chinese EV market includes about 100 brands, seven with 2%+ share, driven by government investment, heavy discounting, and supplier payment delays. BYD is expanding globally but faces market blocks in places such as the United States and may struggle to reach its goal of more than half sales outside China by 2030.

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