Warren Buffett’s BYD Investment: A Smart Move in the EV Market

Warren Buffett’s long-term investment in China’s BYD shows his smart strategy in the electric vehicle (EV) industry. While Tesla faces challenges, Buffett’s stake in BYD highlights his value investing approach.

Buffett’s Early Investment in BYD

In 2008, Berkshire Hathaway invested $230 million for a 9.9% stake in BYD. By 2024, even after reducing its holdings, Berkshire’s position grew to between $6 billion and $8 billion. This shows Buffett’s early belief in BYD was well-founded.

BYD Surpasses Tesla

In March 2025, BYD surpassed Tesla in quarterly automotive revenue. BYD sold 1.76 million battery-electric vehicles (BEVs) in 2024, nearly matching Tesla’s 1.79 million. BYD also sold more new energy vehicles (NEVs), including plug-in hybrids, reaching 4.27 million units.

BYD’s Success in Europe

• BYD sold more BEVs than Tesla in Europe in April 2025.
• High demand for practical, cost-efficient models like the Seagull and Dolphin.
• BYD’s Blade Battery technology and vertical integration help maintain margins.

Tesla’s Challenges

• Tesla reported a 13% drop in Q1 2025 deliveries.
• Factory delays and increasing competition from Chinese rivals.
• Consumer backlash due to Elon Musk’s political controversies.

The EV Price War and Buffett’s Caution

The EV price war began with Tesla’s price cuts in early 2023. Chinese automakers, including BYD, slashed prices to gain market share. Unlike Tesla, BYD had a cost advantage with its in-house battery production and localized supply chains.

Tesla’s Margin Erosion

• Tesla’s margins have dropped sharply in Europe and China.
• Musk’s political persona has hurt Tesla’s brand appeal.

Buffett’s Investment Principles

• Buffett avoids the automotive sector’s capital intensity and cyclicality.
• Tesla’s high volatility and lack of steady cash flows do not meet Buffett’s criteria.
• Buffett credits Charlie Munger for championing BYD.

Global Strategy: Tesla Contracts, BYD Expands

While Tesla focuses on the US and Europe, BYD is expanding into Latin America, Southeast Asia, and parts of Europe. BYD’s local partnerships and manufacturing bases help avoid tariffs and offer price-sensitive models in developing markets.

BYD’s Competitive Advantage

• BYD’s cost structure remains competitive even as subsidies taper.
• BYD is well-positioned for the next wave of global EV adoption, especially in the mass-market space.

Buffett’s Green Energy Strategy

• Berkshire Hathaway Energy has invested billions in renewable infrastructure.
• The BYD investment complements Buffett’s long-term bet on a low-carbon economy.

Buffett once said, “We only swing at pitches we like.” He didn’t miss Tesla — he chose a better pitch. In a sector full of hype, BYD stands as a testament to the power of patient capital. Buffett’s legacy in the EV revolution looks more prescient than ever.