Warren Buffett’s Big Bet on EV Batteries Is Finally Paying Off
The Oracle of Omaha isn’t a fan of Tesla stock, but he likes another player in the electric car space
Warren Buffett and Tesla have a contentious relationship. After all, the most influential investor of our time has gone on the record saying he would not invest in Elon Musk’s electric vehicle company, despite it being one of the biggest stock market successes of our time. But just because the Oracle of Omaha isn’t bullish on Tesla doesn’t mean he’s written off the EV market entirely.
In fact, through his holding company Berkshire Hathaway, Buffett has been betting big on EV batteries since all the way back in 2008, the year the Tesla Roadster was released and most people still thought electric vehicles were the stuff of Hollywood fantasy. As Anjani Trivedi explains in a new opinion piece for Bloomberg, the company Buffett put his money on was China’s BYD, which builds cars and, more importantly, batteries for EVs.
“The value of Berkshire Hathaway Inc.’s holdings in BYD Co. Ltd. … has skyrocketed this year: BYD’s share price is up almost 30%,” Trivedi writes. “Buffett has backed BYD for over a decade, holding around 22% in the Hong Kong-listed company, which now sits on a market capitalization of over HK$915.6 billion ($117.6 billion). That’s more than investor darling Nio Inc., the new-generation Chinese automaker listed in New York.”
What sold Buffett on the original investment — a 10% stake for about $230 million — was not necessarily the technology, but the person behind it. Berkshire Vice Chairman Charlie Munger was reportedly impressed with BYD chemist and researcher Wang Chuanfu (who is also the founder, chairman and CEO of the company), describing him as a cross between Thomas Edison and Jack Welch.
Today, BYD’s strength lies in its safe, affordable battery technology. Whereas some automakers are struggling with EV battery fires, the Chinese company is developing less volatile models; according Chinese sources cited by Trivedi, even Tesla is testing a BYD battery for its Model Y vehicle.
BYD doesn’t currently sell its electric vehicles in the U.S., but even if they don’t make the jump to the States anytime soon, there is the possibility for other automakers to tap their battery tech. But everyone has their sights set on a better battery these days, it’s just a matter of time before someone makes a big breakthrough.
Now we know who Buffett is betting on.
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