Core Viewpoint - The exit of Warren Buffett's Berkshire Hathaway from BYD raises questions for investors, but the company still shows potential for growth and profitability in the electric vehicle market [2][4][13] Group 1: Investment Background - Berkshire Hathaway has fully exited its 17-year investment in BYD, which began in 2008 with an investment of $230 million for approximately 225 million shares, representing about 10% of the company at that time [4][5] - The investment yielded a remarkable increase of about 3,890% during the holding period [5] Group 2: Current Market Conditions - BYD's domestic sales, which account for roughly 80% of its global shipments, have declined for four consecutive months as of August, leading the company to cut its annual sales target by 16% to 4.6 million vehicles [6][12] - Despite the exit of Berkshire Hathaway, there are still positive developments for investors, including the company's diversification and expansion into ultra-premium vehicles [7][9] Group 3: Strategic Developments - BYD is shifting its brand image by developing ultra-premium vehicles priced over $200,000, moving away from its previous focus on affordability [9] - The company maintains a competitive edge through vertical integration, producing nearly all vehicle parts in-house, including batteries, which enhances speed, flexibility, and cost efficiency [10] Group 4: Growth Potential - The International Energy Agency forecasts that hybrids and full EVs will make up 80% of new car sales in China by the end of the decade, up from about 50% today, indicating significant growth potential for BYD [12] - BYD has yet to enter the U.S. market, which presents a lucrative opportunity for expansion once trade barriers are addressed [12][13]
Is It Time to Throw in the Towel on BYD Company?