How BYD became a $10B bet for Berkshire Hathaway
What's the story
During the 2008 global financial crisis, investing legend Charlie Munger spotted a unique opportunity in Chinese electric vehicle (EV) maker BYD. His faith in the company led Berkshire Hathaway to buy a nearly 10% stake for $225 million. The investment turned into one of Berkshire's most profitable bets, yielding profits of around $10 billion by 2025 when it exited the investment.
Strategic insight
Wang Chuanfu's leadership impressed Munger
Munger's decision to invest in BYD was largely based on his faith in its founder, Wang Chuanfu. He described Wang as a "genius" with an unusual combination of qualities rarely seen in business leaders. Munger said, "Partly I'm betting on the horseman up there," implying that his confidence in BYD was heavily tied to Wang's leadership and vision.
Competitive edge
Technological prowess and dedicated workforce
Munger was impressed by BYD's technological strength and its ability to absorb and develop entirely new technologies. He also highlighted the company's workforce as a competitive advantage, noting their scale and dedication. At the time, Munger said that BYD employed hundreds of thousands of workers who could achieve things "you can't believe."
Admiration
Munger's vision for BYD's future
Munger viewed Wang as a symbol of entrepreneurial success in China. He famously referred to him as the "eighth son of a peasant," highlighting his rise from humble beginnings. Interestingly, Munger said he did not want Berkshire to fully acquire BYD because its identity as a Chinese company was part of its strength.
Exit strategy
A remarkable surge
Berkshire Hathaway's investment in BYD via its subsidiary MidAmerican Energy (now Berkshire Hathaway Energy) became one of its most successful international bets. The company began selling shares in 2022 after BYD's share price had skyrocketed over twentyfold. By 2025, the investment had generated an estimated profit of around $10 billion, marking a remarkable turnaround from the initial $225 million stake.