"Warren Buffett's still the smartest investor in the universe. I mean, so he got into BYD, which is now the largest EV company. What was a stinking little company in 2008? He put in about $200 million and he got 10% of BYD. Which is now, oh, by the way, the largest EV company in the world. He just sold his last few shares in it earlier this year. So, let's look at the trajectory he buys in when no one cares about EVs, right?"
"Fast forward, China then becomes the largest EV market in the world. BYD becomes the largest seller of EVs in China, and it starts to expand overseas. Mr. Buffet, again, may be looking over the horizon, sees that all of a sudden in China, sees BYD is going to be part of about a hundred other EV companies, right? It's gonna be massive discounting. Their margins are gonna drop, their estimated unit sales are gonna drop."
Warren Buffett invested about $200 million in BYD in 2008 and acquired roughly a 10% stake. BYD grew into the largest electric vehicle seller in China and expanded internationally. Buffett began selling portions of the position around three years ago and sold the remaining shares earlier this year. Charlie Munger prompted the initial investment decision. Observed pressures include intensifying competition in China, anticipated margin compression from discounting, potential declines in unit sales, and challenges for Chinese EVs entering foreign markets. The divestment was executed gradually rather than as a single sale.
Read at 24/7 Wall St.
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