Berkshire Hathaway Increases Sale of BYD Shares, Reduces Stake Below 6%

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Warren Buffett’s Berkshire Hathaway has significantly accelerated its sale of shares in BYD, China’s largest electric vehicle manufacturer. According to a Tuesday filing with the Hong Kong stock exchange, Berkshire reduced its stake in BYD’s issued H-shares to 5.99% on June 19, down from 7.02% on June 11.

In Hong Kong, regulations require larger shareholders to disclose sales when their resulting stakes fall below whole percentage numbers. This means Berkshire may cease disclosing its BYD sales after its ownership falls below 5%.

Buffett’s investment in BYD dates back to 2008, when Berkshire Hathaway paid $230 million for approximately 225 million shares, which at the time represented a 10% stake. The company began disclosing sales of BYD shares in August 2022, following a more than 20-fold increase in BYD’s share price, which had hit a record high just two months earlier. However, the share price has since dropped by about 28%.

Charlie Munger, Berkshire’s late vice chairman, was the main advocate for the BYD investment, and Buffett has consistently credited him for the decision. Despite this significant international investment, Berkshire primarily focuses on investments within the United States.

BYD, founded in 1995 by Chinese chemist Wang Chuanfu as a manufacturer of rechargeable batteries, has grown to become a major player in the electric vehicle market. Last year, BYD surpassed Elon Musk’s Tesla to become the world’s largest electric vehicle maker. However, Tesla reclaimed the top spot in the first quarter of this year.

As of the end of March, Berkshire Hathaway held $189 billion in U.S. Treasury bills, cash, and equivalents, having sold $20 billion worth of stock, primarily Apple shares, in the first quarter. This cash stake includes $182.3 billion outside of Berkshire’s railroad, utilities, and energy businesses. At Berkshire’s annual meeting on May 4, Buffett indicated it was a “fair assumption” that this cash amount could grow to $200 billion by the end of the quarter.