In a move that marks the end of a legendary investment chapter, Berkshire Hathaway has fully sold its stake in Chinese electric vehicle giant BYD, a holding that grew from a modest initial investment into one of the conglomerate’s most profitable international wagers.
The divestment, which began in 2022 and concluded recently, brings to a close a 17-year-long partnership that was a testament to the foresight of the late Charlie Munger, Warren Buffett’s long-time business partner.
Berkshire’s journey with BYD began in 2008, when the company was a relatively unknown battery manufacturer. At the urging of Charlie Munger, Berkshire invested $230 million for 225 million shares, acquiring a 10% stake in the Shenzhen-based company. While the move seemed out of character for Buffett’s typical investment playbook, Munger defended it, calling BYD founder Wang Chuanfu a “damn miracle.”
That assessment proved remarkably accurate. Over the next decade and a half, BYD’s shares surged by thousands of percent, as the company transformed into a global powerhouse in electric vehicles and batteries. The original $230 million investment swelled to a peak value of nearly $9 billion, delivering an extraordinary return that underscored the brilliance of the initial call.
Munger was all praise for BYD and its management. In 2023, during the annual meeting at the Daily Journal Corp., where he served as a director, Munger said, “I have never helped do anything at Berkshire that was as good as BYD.”
Berkshire’s decision to exit was not abrupt. The company began trimming its position in August 2022, capitalising on a significant run-up in BYD’s stock price. The sell-down was gradual, and by mid-2024, Berkshire’s holding had fallen below the 5% disclosure threshold in Hong Kong, allowing subsequent sales to go unreported. The final confirmation of the full exit came from a quarterly filing by Berkshire Hathaway Energy, which listed the value of its BYD stake as zero as of March 31, 2025.
While Buffett has not provided a detailed explanation for the divestment, he has previously hinted at a reevaluation of geopolitical risks associated with Chinese investments. In 2023, he sold a major stake in Taiwan Semiconductor Manufacturing Company (TSMC) just months after buying in, citing a “dangerous world.” This suggests that a similar consideration of the evolving U.S.-China relationship may have played a role in the BYD exit. Furthermore, Buffett stated in a 2023 interview that BYD is an “extraordinary company” but that he felt he could find “things to do with the money that I’ll feel better about.”
Meanwhile, the BYD exit comes at a time when Buffett has been gradually selling shares and adding to Berkshire’s cash positions. Berkshire Hathaway was a net seller to the tune of $3 billion in Q2 2025. It was the 11th consecutive quarter when the Warren Buffett-led conglomerate net sold stocks. The company ended June with a cash pile of $344.09 billion, which is slightly below the $347.7 billion that the company reported at the end of March.
To gauge the size of that cash pile, consider the fact that Berkshire now owns over 5% of all outstanding U.S. Treasury bills.
Responding to a question over the burgeoning cash pile, during this year’s annual shareholder meeting, Buffett said, “We have made a lot of money by not wanting to be fully invested at all times.”
Notably, a brutal price war has been ongoing in the Chinese EV industry since Q4 2022, when Tesla began cutting car prices to spur sales.
Tesla’s price cuts were followed by similar announcements from other carmakers, including Xpeng Motors, Ford, Toyota, and Nissan. In 2023, even NIO lowered car prices. Previously, the company had categorically said that it wouldn’t join the price war.
The China Association of Auto Manufacturers (CAAM) tried to bring about a truce in the price war in 2023, but that effort failed.
A total of 16 automakers, including Tesla (which was the only foreign automaker in the lot), signed the pledge at an industry conference in Shanghai, which stated they “take on the heavy responsibility of maintaining steady growth, strengthening confidence and preventing risks.”
However, the truce failed, and shortly, CAAM retracted the pledge and said that the EV price war agreement violated China’s antitrust law.
The Chinese government cracked down on the EV price war again and urged carmakers to ease up on the “involution,” or self-destructive competition, that the price war has created. This has limited BYD’s ability to rely on aggressive discounting, a primary tool in its arsenal. Additionally, regulators have scrutinized other practices, such as subsidy fraud and the practice of briefly registering new cars to boost sales figures.
While the price cuts helped BYD buoy deliveries, they took a toll on its profits. For instance, while the company’s Q2 revenues rose 14% year-over-year, its net profits tanked 30%, far worse than expected. Moreover, it was the first time in three years that the company’s profits fell in any quarter.
Notably, BYD, which initially set an ambitious goal of selling 5.5 million vehicles this year, is said to have lowered its internal forecast to 4.6 million units. This decision marks the company’s slowest annual growth rate in five years and comes amid intensifying competition and slowing growth in China, the world’s biggest market for new energy vehicles.
In this year’s annual letter, Buffett had said, “Berkshire shareholders can rest assured that we will forever deploy a substantial majority of their money in equities – mostly American equities, although many of these will have international operations of significance.”
“Berkshire will never prefer ownership of cash-equivalent assets over the ownership of good businesses, whether controlled or only partially owned,” added Buffett in the letter.
Buffett, however, hinted that he does not find market valuations attractive and said, “We are impartial in our choice of equity vehicles, investing in either variety based upon where we can best deploy your (and my family’s) savings.” The nonagenarian added, “Often, nothing looks compelling; very infrequently, we find ourselves knee-deep in opportunities.”
Berkshire hasn’t been able to close any major deal over the last couple of years. At this year’s annual shareholder meeting, Buffett said that Berkshire “came pretty close to spending $10 billion,” for the deal did not go through. He added, “I mean, those decisions are not tough to make when something is offered that makes sense to us and that we understand and offers good value.”
The nonagenarian, however, dismissed the idea that he is stockpiling the cash for his successor, Greg Abel, and joked, “I wouldn’t do anything nearly so noble.” Notably, Buffett has announced his retirement at the annual meeting, and Abel will step into his shoes next year.
The post Berkshire Hathaway exits BYD as Buffett continues share selling spree appeared first on BuyShares.co.uk.
Also read: Best Crypto to Buy Now: Top 5 Trending Tokens for Smart Investors
