Warren Buffett‘s Berkshire Hathaway has reduced its stake in China’s BYD, which last year surpassed Tesla as the world’s largest seller of electric vehicles.
According to a filing with the Hong Kong stock exchange, Berkshire recently sold 1.3 million Hong Kong-listed BYD shares for HK$310.5 million ($39.8 million).
This transaction lowered its stake in BYD’s issued H-shares from 7.02% to 6.90%.
Berkshire Hathaway started investing in Shenzhen-based BYD in 2008, acquiring approximately 225 million shares for $230 million, which then represented a 10% stake.
The company began selling shares in 2022 after BYD’s share price had increased more than twentyfold.
Since peaking in June 2022, the share price has declined by about 30%. Tesla reclaimed its position as the largest electric vehicle seller in April this year, overtaking BYD.
The investment in BYD was the idea of Charlie Munger, Berkshire’s late vice chairman.
Munger highlighted his pride in the investment during the 2023 annual meeting of the Daily Journal, a publishing and software company.
He remarked, “I had never helped do anything at Berkshire that was as good as BYD.”
Berkshire Hathaway primarily focuses its investments in the United States.
However, Buffett acknowledged the success of the BYD investment as an exceptional case.
At the company’s annual meeting in Omaha, Nebraska, Buffett explained, “Charlie twice has pounded the table with me and just said, you know, ‘Buy, buy, buy.’ BYD was one of them, and Costco was the other…. He was right, big time, in both companies.”
Despite Berkshire’s overall U.S.-centric investment strategy, the foray into BYD has proven to be significantly rewarding, demonstrating the value of strategic international investments.
This move reflects Berkshire’s occasional willingness to diversify beyond domestic markets when compelling opportunities arise.