Who doesn’t know the figure of Warren Buffett? A well-known big investor. One of his most fantastic investment stories is in China electric vehicle. Warren Buffett’s Berkshire Hathaway that has generated more than US $ 7 billion from his investment in Chinese electric vehicle BYD. If calculated from the start of the investment until now, the profit is up to 3,000%!
Quoting Business Insider, Warren Buffett is known to spend US $ 232 million to buy 225 million shares in Chinese electric vehicle companies in 2008, paying about US $ 1 per share.
Hong Kong-listed BYD shares have skyrocketed 30 times to the equivalent of US $ 33 since then, up five times in value over the past year alone. Its market capitalization also skyrocketed from the previous US $ 3 billion to more than US $ 95 billion.
Berkshire Deputy Chairman Influences Warren Buffett’s Decision
Warren Buffet was first interested in buying BYD because of the interference of Berkshire Deputy Chairman Charlie Munger. At that time, Warren Buffet was also interested in BYD founder Wang Chuanfu.
“Charlie called me one day and said, We should buy BYD, the guy who runs it better than Thomas Edison,” Warren Buffett told CNBC in 2018.
Warren Buffett was finally quite impressed. He and his team started talks with BYD and initially offered to buy 25% of the business.
Wang wanted the American billionaire’s support, because he knew it would raise the carmaker’s public profile and help it break into the US market. However, he turned down Warren Buffett’s offer because he didn’t want to sell more than 10% of BYD.
“This is a guy who doesn’t want to sell his company,” Warren Buffett told Fortune. “That’s a good sign.”
Berkshire finally decided to buy a 9.9% stake in BYD, which was bought by its subsidiary MidAmerican Energy. The holdings represent approximately 25% of BYD’s Hong Kong-listed shares, and 8.25% of the total outstanding shares.
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