Tesla this! Tesla that!
But have you ever heard of BYD? BYD (short for Build Your Dreams) is a Chinese electric vehicle company partially owned by Warren Buffet’s Berkshire Hathaway. Berkshire Hathaway invested $232 million in BYD in 2008. Buffet’s investment is now worth $7.7 billion.
For the first half of 2022, BYD became the largest maker of electric vehicles, surpassing Tesla. BYD sold slightly more than 641,000 vehicles, nearly 487,000 more cars than it sold in the first half of 2021. Tesla sold a little under 565,000 vehicles during the first six months of this year, slightly more than 178,000 over what the company sold during the same period in 2021. It should be noted, only half of BYD’s sales were fully electric vehicles (BEV). The other half were plug-in hybrids (PHEV). Of course, one hundred percent of Tesla sales are fully electric vehicles. However, every BYD PHEV or BEV model sold probably eliminates the sale of a Tesla vehicle as well. While EV purists might disagree, someone buying a BYD PHEV in China is probably not buying a pure EV Tesla as well.
BYD was founded and is led by Wang Chuanfu. It was Wang who convinced Warren Buffet to initially invest in his company. Early in its existence, BYD developed useful core competencies by making batteries and related components for mobile phone companies like Motorola and Nokia. This experience drove the company to master vertical integration from the lithium and nickel mines necessary for EV battery production to the computer chips used in automobiles.
Elon Musk once said of BYD, “Have you seen their car? I don’t think they have a great product.” Musk might be regretting these comments. Not only is BYD beating Tesla in vehicle sales, but there are now reports that Tesla will begin using BYD electric vehicle batteries. Imagine a competitor becoming a supplier of a critical component for your product. This is what Tesla will experience when BYD begins supplying batteries to the company. Today, BYD is the world’s second largest producer of electric vehicle batteries behind CATL (another Chinese company that also supplies batteries to Tesla).
While many outside of China have never heard of BYD, the fact that Warren Buffet invested in the company 14 years ago with massive returns since then means that investors should pay a lot more attention to the company and its impact on the EV space.
Disclaimer
TaaSMaster, LLC is not a registered investment advisor or broker/dealer. All investment opinions expressed by TaaSMaster, LLC are from personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors may occur.