BYD
Company Overview
BYD (Build Your Dreams) is a Chinese manufacturer of electric vehicles, rechargeable batteries, electronics, and energy storage systems. Founded in 1995 by Wang Chuanfu, BYD has grown from a small battery manufacturer into China's largest electric vehicle maker and one of the world's most significant clean energy companies. Berkshire's investment in BYD represents one of the most profitable investments in the company's history — and the most important investment driven primarily by Charlie Munger's conviction.
Investment Story
2008: Munger's conviction. Berkshire invested approximately $232 million in BYD in September 2008, acquiring about 225 million shares representing roughly 10% of the company at HK$8.0 per share. The investment was primarily championed by Charlie Munger, who credited BYD founder Wang Chuanfu as 'a combination of Thomas Edison and Jack Welch — something like Edison in solving technical problems, and something like Welch in getting done what he decided to do.' Buffett was more cautious but deferred to Munger's conviction.
2008–2022: Extraordinary appreciation. BYD's shares rose from HK$8.0 at Berkshire's purchase to over HK$350 at their 2022 peak — a roughly 40x return on the original investment, turning $232 million into approximately $9 billion at peak value.
The EV revolution validation. BYD's growth reflected China's government commitment to electric vehicles, Wang Chuanfu's engineering genius in battery chemistry and vehicle integration, and Chinese consumers' rapid adoption of affordable EVs. BYD became China's bestselling car brand, selling over 1.8 million electric vehicles in 2022.
2022–2023: Partial sales. Berkshire began reducing its BYD position in August 2022, selling shares gradually. By early 2023, the stake had been reduced to approximately 11% of original shares. Buffett cited no specific reason; the obvious interpretation was valuation — BYD's stock had appreciated to levels where the risk/return was less asymmetrically favorable than when purchased.
Governance at current prices. BYD's HK listing price by 2022 reflected extraordinary optimism about electric vehicle adoption and BYD's competitive position within China. The sales represent Buffett's discipline about not holding permanently when confidence about future intrinsic value growth diminishes.
Buffett's Own Words
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The future will be represented by a new plug-in electric car developed by BYD, an amazing Chinese company in which we have a 10% interest. An attachment to the proxy material that is enclosed with this report explains how you can obtain the credential you will need for admission to the meeting and other events. As for plane, hotel and car reservations, we have again signed up American Express (800-799-6634) to give you special help. Carol Pedersen, who handles these matters, does a terrific job for us each year, an
The future will be represented by a new plug-in electric car developed by BYD, an amazing Chinese company in which we have a 10% interest. An attachment to the proxy material that is enclosed with this report explains how you can obtain the credential you will need for admission to the meeting and other events. As for plane, hotel and car reservations, we have again signed up American Express (800-799-6634) to give you special help. Carol Pedersen, who handles these matters, does a terrific job for us each year, an
BYD Company, Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.9 1,986 200,000,000 The Coca-Cola Company . . . . . . . . . . . . . . . . . . . . . . . . . . 8.6 1,299 11,400 37,711,330 ConocoPhillips . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5 2,741 1,926 28,530,467 Johnson & Johnson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.0 1,724 1,838 130,272,500 Kraft Foods Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.8 4,330 3,541 3
BYD Company, Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.9 1,182 200,000,000 The Coca-Cola Company . . . . . . . . . . . . . . . . . . . . . . . . . . 8.6 1,299 13,154 29,109,637 ConocoPhillips . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.0 2,028 1,982 45,022,563 Johnson & Johnson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6 2,749 2,785 97,214,584 Kraft Foods Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6 3,207 3,063 19
Investment Lessons
Munger's conviction was the complete investment thesis. This is one of the very few major Berkshire investments where Buffett was not the primary analyst — he has said explicitly that Munger convinced him. The lesson is not that Buffett was wrong to defer to Munger but that exceptional investors can sometimes identify opportunities from a combination of qualitative insight (great founder), sector knowledge (batteries as competitive moat), and country familiarity (China's EV policy trajectory) that doesn't fit neatly into established analytical frameworks.
Founder-quality businesses deserve patient capital at founding valuations. Wang Chuanfu is a genuine business genius who built a vertically integrated manufacturing empire from scratch. Identifying such founders early — before their companies have demonstrated public market success — and backing them with patient capital is one of the highest-return investing strategies available, though also one of the most difficult to execute reliably. The BYD investment was made in 2008, well before BYD's EV dominance was apparent.
Geographic and currency exposure beyond Berkshire's usual comfort. BYD is Berkshire's largest investment outside North America and one of its few direct investments in China. The successful outcome doesn't negate the genuine additional risks of investing in Chinese companies subject to unique regulatory, political, and corporate governance considerations. Berkshire's limited Chinese portfolio reflects appropriate caution about these additional risk factors.