Warren Buffett’s Investment in BYD
Warren Buffett, known as the ‘Oracle of Omaha’, recognized BYD as a promising company back in 2008. Berkshire Hathaway, Buffett’s investment holding, acquired 225 million shares of BYD for about 230 million US dollars at that time, which constituted nearly 10 percent of the company. Today, this stake has grown to six to eight billion US dollars, roughly 25 to 30 times the original investment. Although Berkshire Hathaway has since reduced its position in BYD, Buffett remains excited about the company.
Success Factors of BYD
BYD has significantly increased its sales figures in the first quarter of 2025. In March, the company sold 377,420 vehicles, representing a 24.8 percent increase compared to the previous year. BYD delivered a total of 1,000,804 New Energy Vehicles (NEV) in the first quarter, a 59.8 percent increase year-over-year. A key factor in BYD’s success is vertical integration, allowing the company to control every part of its supply chain, from lithium mines to semiconductors, batteries, and motors. Moreover, BYD has developed innovative technologies such as the Blade battery and the autonomous driving system ‘God’s Eye’.
Tesla’s Challenges
In contrast, Tesla is struggling with declining sales figures. In the first quarter of 2025, deliveries fell by about 13 percent to 336,681 vehicles, which is well below analysts’ expectations. A potential reason for this decline might be the transition to a new generation of the Model Y. Furthermore, Tesla produced 16 percent fewer vehicles during the same period compared to the previous year. Increasing criticism of Tesla CEO Elon Musk and calls for boycotts have also contributed to the challenges.
Market Predictions and Investor Perspectives
Cathie Wood, founder of Ark Invest, remains optimistic that Tesla can defend its market leadership, especially through innovations in autonomous driving. In contrast, BYD outperformed Tesla in revenue in 2024 and offers innovative technologies such as revolutionary fast chargers.
For investors, BYD is attractive due to its strong fundamentals and favorable valuation. The price-earnings ratio for BYD is around 27, whereas Tesla has a ratio of over 100. Additionally, BYD boasts a higher gross margin than many of its Chinese competitors, even though Tesla achieved a higher operating margin in 2024.