In recent news, Warren Buffett’s Berkshire Hathaway has made another move in reducing its stake in BYD, a major electric car maker in competition with Tesla. On June 11, the conglomerate sold 1.35 million Hong Kong-listed shares of BYD, lowering its stake from 7.02% to 6.9%, as reported in a Hong Kong stock exchange filing. The sale amounted to 310.5 million Hong Kong dollars ($40 million), marking the first significant sale of BYD shares by Berkshire in ten months and the 14th overall since August 2022.
This development comes amid escalating global trade tensions over Chinese electric vehicles. China has established itself as a significant player in the EV market, benefiting from government policies and state subsidies. However, the influx of inexpensive EV models has raised concerns and triggered trade disputes with Western partners. Last week, the European Union imposed additional tariffs on EVs imported from China, citing unfair competition practices.
In response, Beijing has threatened to retaliate, further exacerbating the trade conflicts. Tensions between China and the United States have also grown over the issue of EV imports, with the Biden administration increasing tariffs on Chinese EVs earlier this year.
Buffett’s initial investment in BYD in 2008 has been a massive success story for Berkshire, with the Chinese EV maker’s stock price soaring over the years. Despite the recent sales of BYD shares, Berkshire still holds a substantial stake in the company. However, the reasons behind the ongoing divestment have not been disclosed by Berkshire. Buffett credited his late business partner Charlie Munger for the decision to invest in BYD, acknowledging Munger’s foresight in the matter.
