American billionaire investor Charlie Munger openly stated that Tesla lags far behind BYD in the world’s largest auto market during the Daily Journal’s virtual annual meeting on February 15.
For context, Munger is the Vice President of Warren Buffet’s holding company Berkshire Hathaway.
“Tesla last year reduced its prices in China twice. BYD increased its prices. We are direct competitors. BYD is so much ahead of Tesla in China, it’s almost ridiculous.”
US investor Charlie Munger
Why does Charlie Munger prefer to invest in BYD than Tesla?
Charlie Munger asserted in the virtual meeting that BYD accumulated over $2 billion after taxes in the Chinese auto industry, stating that it was “incredible.”
“If you count all the manufacturing space they have in China to make cars, it would amount to a big percentage of the Manhattan island, and nobody had ever heard of them a few years ago.”
Charlie Munger
The legendary investor also proudly shared that Berkshire’s initial investment in BYD now reached approximately $8 billion to $9 billion.
“I have never helped do anything at Berkshire [Hathaway] that was as good as BYD, and I only did it once.
… That’s a pretty good rate of return.”
US investor Charlie Munger
In retrospect, Berkshire Hathaway initially acquired around 220 million BYD shares in September 2008. In the past decade, the holding surged over 600%, significantly boosted by the rapidly growing EV adoption.
As we have previously reported, Berkshire had sold a significant amount of its BYD holdings to maximize its return on investment.
“At the current price of BYD stock, little BYD is worth more than the entire Mercedes corporation. It’s not a cheap stock, but on the other hand, it’s a very remarkable company.”
US investor Charlie Munger
Apart from those, Charlie Munger also seems to admire BYD CEO Wang Chuanfu, stating that he is a “genius and a workaholic.”
BYD vs. Tesla
In 2022, Chinese EV and power battery giant BYD reported NEV sales of 1,863,494 units, per CnEVPost’s data. Of that total, plug-in hybrid passenger cars accounted for 946,239 units. Meanwhile, the battery electrics sold 911,140 units. The remaining 6,115 was contributed by commercial vehicles.
On the other hand, the American EV giant Tesla reported global sales of 1,313,851 EVs in 2022. Of that total, 439,770 units were contributed by Chinese customers.
Despite all that, the prominent investor still respects Tesla CEO Elon Musk, saying he is talented and peculiar.
“I don’t buy him, and I don’t short him.”
US investor Charlie Munger
