Warren Buffett’s strategic investment in BYD benefiting as tesla falls

The decision of Berkshire Hathaway CEO Warren Buffett to invest in BYD in the year 2008 is considered to be a smart decision. As the company has been able to showcase a considerable performance in the present times.

All the electric car stocks are considered sell-off options in the present situation in China and US, the BYD has been able to stick to its positive performance in recent times.

Warren Buffett’s strategic investment in BYD benefiting as tesla falls 

source : drive.com

In the past three months, the share prices of provide are just down by 2%. This is considered a positive move considering the 9% decline of XPeng and 37% of Nio along with a 52% decline of Rivian, a 51% plunge for Lucid, and a 54% decline in TeslaAnd in the past year, BYD is down just 19%, compared to declines of about 70% for Tesla and Nio, and a decline of 78% for XPeng.

This positive share outcome of BYD has been the result of its record sales in the year 2022, as BYD has been able to sell approximately 1.9 million vehicles. With the sales, BYD has been able to surpass the sales of Tesla in the year 2022 as Tesla has been able to sell only 1.3 million vehicles in the same period.

The reasons of Buffet’s investments into BYD

The major reason for this increased shares price and positive performance of BYD is the difference in the selling prices of both of their vehicles as BYD’s both plug-in hybrid vehicles and fully electric vehicles are less costly than and both of these vehicles are sold at a lower price than Tesla’s lowest priced model 3.

The mass affordability of electric vehicles is considered one of the popular choices amongst all Chinese customers and that has been considered an instant move by Tesla to continuously cut their prices in China. With the recent second cut in the prices in the tenure of fewer than 3 months since last week.

source : yahoo.finance.com

This issue is considered one of the major reasons for the slowdown of Tesla demand in recent times.Although Buffett’s Berkshire Hathaway has reduced their stick in BYD in the year 2022, still Berkshire Hathaway is having a 16% stake in BYD as of 2022. 

BYD Auto Co., Ltd. is a Chinese multinational automobile manufacturer based in Xian, Shaanxi province, China. The company was founded in 1995 and has grown to become one of the largest automobile manufacturers in China, with a focus on the production of electric vehicles (EVs). In recent years, BYD has also expanded its operations to other countries, including the United States and Canada.