Hello from Tokyo. Berkshire Hathaway, led by the legendary U.S. investor Warren Buffett -- known as the "Oracle of Omaha" -- has sold off its entire stake in China's BYD, the global leader in electric vehicle sales by volume. Berkshire first invested in BYD in September 2008, when the world was plunging into a financial crisis. That same year, Silicon Valley-based EV startup Tesla released its first vehicle, the Roadster two-seater sports car, and BYD, which was founded as a battery manufacturer, launched its first plug-in hybrid vehicle.
Seventeen years on, BYD and Tesla compete fiercely for global EV supremacy as they disrupt the automotive industry's more than century-old order. While traditional automakers in Japan, the U.S. and Europe initially hesitated to embrace electrification, BYD and Tesla fully committed to it. Tesla led the EV race at first, but thanks in part to Chinese government policies promoting the electrification of its auto industry, BYD now outsells Tesla in EVs worldwide.
The global EV market expanded dramatically during the time Berkshire held shares in BYD. The EV maker's revenue soared 37-fold to 777 billion yuan (about $109 billion) last year compared with the year before Berkshire's investment, while net profit surged 25-fold to over 40 billion yuan.
Berkshire's investment in BYD helped mark the discovery of a future global EV leader, but the timing of its exit could be just as significant. The outlook for the EV industry is becoming more uncertain. BYD is caught in a fierce price war within China's domestic market. Meanwhile, Tesla's growth has slowed due to intensifying competition from Chinese companies. BYD's post-Berkshire fate, of course, remains to be seen, and one of Nikkei Asia's core strengths is our knowledge of the global EV industry. Be sure to follow us for our latest coverage.
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Wishing you a wonderful weekend!
Akito Tanaka
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