Warren Buffett’s calculated, long-horizon investment in China’s BYD is proving to be one of his most consequential bets in the electric vehicle (EV) industry — not just in terms of returns, but in how clearly it contrasts with his conscious avoidance of Elon Musk’s Tesla. While Tesla grapples with a global slowdown, Buffett’s BYD stake is becoming a case study in value investing outlasting market hype.
Back in 2008, Berkshire Hathaway stunned markets with its $230 million investment for a 9.9% stake in BYD. More than 15 years later, even after trimming its holdings below 5% in 2024, Berkshire’s position is now worth between $6 billion and $8 billion. The gradual reduction is widely viewed as profit-booking, not a retreat — the underlying message is clear: Buffett was right early, and he’s still winning.
BYD races ahead of Tesla
In March 2025, BYD surpassed Tesla in quarterly automotive revenue for the first time, signaling a deep shift in EV industry leadership. BYD sold 1.76 million battery-electric vehicles (BEVs) in 2024, nearly matching Tesla’s 1.79 million, and far outpaced its rival in total new energy vehicle (NEV) sales — including plug-in hybrids — reaching 4.27 million units.
In Europe, BYD edged past Tesla in April 2025 BEV sales for the first time, according to JATO Dynamics, buoyed by strong demand for practical, cost-efficient models built around its proprietary Blade Battery technology. BYD’s approach to vertical integration and low-price offerings like the Seagull and Dolphin has helped it maintain margins in a brutal price war.
Tesla, meanwhile, reported a 13% year-on-year drop in Q1 2025 deliveries — the first full-year decline came in 2024. The company is struggling with factory delays, increasing competition from Chinese rivals, and growing discomfort with Elon Musk’s political controversies, which have sparked consumer backlash in key markets.
The EV price war and Buffett’s prudence
The EV price war, triggered by Tesla’s early 2023 price cuts, turned into an all-out battle. Chinese automakers — BYD foremost among them — slashed prices, sacrificing margin for market share. Unlike Tesla, BYD had a cost advantage: its in-house battery production and localized supply chains made it more resilient.
Tesla’s margin erosion has been sharpest in Europe and China. Observers say Musk’s increasingly political public persona has hurt the brand’s appeal, particularly among environmentally conscious consumers and those wary of executive overreach.
Buffett’s decision not to invest in Tesla aligns with his time-tested principles. At Berkshire’s 2024 annual meeting, he credited the late Charlie Munger with championing BYD: “Charlie twice pounded the table and said, ‘Buy BYD.’ He was right — big time.”
Buffett has always been wary of the automotive sector’s capital intensity and cyclicality. Tesla’s high volatility, lack of steady cash flows, and dependence on market sentiment do not meet Buffett’s threshold for a durable competitive moat.
Global strategy: Tesla contracts, BYD expands
While Tesla has largely focused on the US and Europe, BYD is aggressively expanding into Latin America, Southeast Asia, and parts of Europe through local partnerships and manufacturing bases. This allows the Chinese automaker to avoid tariffs and offer price-sensitive models in developing markets.
Even as subsidies taper in China and US tax incentives become harder to access, BYD’s cost structure allows it to remain competitive in segments where Tesla’s premium branding is less effective. BYD is now better positioned to ride the next wave of global EV adoption — especially in the mass-market space.