BYD (Build Your Dreams)

BYD is a leading Chinese manufacturer of rechargeable batteries, electric vehicles, and renewable energy products. Berkshire Hathaway invested in BYD in late 2008, marking a significant step into the energy transition and international technology markets.

The Investment (2008)

In September 2008, MidAmerican Energy (a Berkshire subsidiary) announced an investment of $232 million for a 10% stake in BYD.

• Champions: The deal was spearheaded by David Sokol and aggressively championed by Charlie Munger, who described BYD's founder, Wang Chuanfu, as a combination of Thomas Edison and Jack Welch.
• Strategic Fit: While Berkshire usually avoids nascent technology, Munger convinced Buffett that BYD's dominance in battery chemistry and lean manufacturing in China created a formidable "moat" in the upcoming electric vehicle revolution.

Evolutionary History

• 2008 Letter: Investment announced. At the time, global focus was on the collapse of traditional US automakers, while Berkshire bet on the battery revolution in China.
• 2010 Letter: Buffett notes that the $232 million investment in BYD is now valued at approximately $1.1 billion.
• 2010 Meeting: Charlie Munger explicitly addresses why Berkshire invested in a tech-driven company like BYD, noting that it is "surfing along on the developing edge of new technology" and that the management's self-discipline resembles that of BNSF or MidAmerican Energy.
• 2011 Meeting: Discussion of delays in EV rollout. Munger remains unfazed, noting that revolutionary technology often faces setbacks. He reaffirms his belief that BYD is the most impressive technology company he has ever studied.

Quotes

• "BYD is one of those rare companies that has the potential to change the world... It’s run by a man who is a remarkable combination of a scientist and a manager." — Charlie Munger
• "BYD is surfing along on the developing edge of new technology... I think the BYD investment is going to work out very well and give great pleasure to all of us shareholders, because they’re going to help solve some significant problems of the world." — Charlie Munger, 2010 Meeting

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• References: 2008 Letter, 2011 Meeting, MidAmerican Energy, Charlie Munger, David Sokol
• Index: index