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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
- References: 2008 Letter, 2011 Meeting, MidAmerican Energy, Charlie Munger, David Sokol
- Index: index
📚 Historical Mentions & Citations (4)
Click a reference document below to expand and read the exact paragraph(s) containing this concept in the archive.
📜2008 LetterExcerpt Available▼
2008 LetterExcerpt Available
Finally, we will have three fascinating cars on the exhibition floor, including one from the past and one of the future. Paul Andrews, CEO of our subsidiary, TTI, will bring his 1935 Duesenberg, a car that once belonged to Mrs. Forrest Mars, Sr., parent and grandparent of our new partners in the Wrigley purchase. The future will be represented by a new plug-in electric car developed by BYD, an amazing Chinese company in which we have a 10% interest.
🎙️2008 MeetingReference Only▼
2008 MeetingReference Only
Mentioned in this document.
📜2009 LetterExcerpt Available▼
2009 LetterExcerpt Available
12/31/09 Shares Company Percentage of Company Owned Cost Market (in $ millions) 151,610,700 American Express Company 12.7 $ 1,287 $ 6,143 225,000,000 BYD Company, Ltd 9.9 232 1,986 200,000,000 The Coca-Cola Company 8.6 1,299 11,400 37,711,330 ConocoPhillips 2.5 2,741 1,926 28,530,467 Johnson & Johnson 1.0 1,724 1,838 130,272,500 Kraft Foods Inc 8.8 4,330 3,541 3,947,554 POSCO 5.2 768 2,092 83,128,411 The Procter & Gamble Company 2.9 533 5,040 25,108,967 Sanofi-Aventis 1.9 2,027 1,979 234,247,373 Tesco plc 3.0 1,367 1,620 76,633,426 U.S. Bancorp 4.0 2,371 1,725 39,037,142 Wal-Mart Stores, Inc 1.0 1,893 2,087 334,235,585 Wells Fargo & Company 6.5 7,394 9,021 Others 6,680 8,636 Total Common Stocks Carried at Market $34,646 $59,034
🎙️2009 MeetingExcerpt Available▼
2009 MeetingExcerpt Available
ANDREW ROSS SORKIN: Excellent. This question actually just came across the BlackBerry before lunch from what I think is an audience member. Josh Wolfe (PH) of New York writes the following: “BYD appears to be more like a venture capital speculative investment than a value investment. Would you both explain that investment, your logic behind it, and your expectations for it?”
WARREN BUFFETT: But Charlie is our team leader here on BYD. And he gets very excited. So I may have to control him. But go to it, Charlie. (Laughter)