Charlie Munger said Wednesday at Tesla
pales in comparison to BYD
in China, calling Chinese electric car manufacturers his favorite.
“I have never helped make anything at Berkshire [Hathaway] as good as BYD and I only did it once,” the 99-year-old investor said Wednesday during a speech. virtual annual meeting of the Daily Journal. Berkshire’s original investment is now worth “about $8 billion or maybe [$9 billion].
BYD is a lucrative bet for Berkshire, which first bought about 220 million shares in September 2008. The stock has jumped more than 600% in the past 10 years amid a boom in electric cars. Berkshire has reduced its stake in BYD over the past year as the stock has risen in price.
“At BYD’s current market price, a small BYD is worth more than the entire Mercedes company. It’s not a cheap product, but on the other hand, it’s a remarkable company,” Munger said.
Munger, a Berkshire vice chairman and a member of the Daily Journal’s board of directors, thanked Li Lu, the founder of Seattle-based asset manager Himalaya Capital, for introducing him to BYD. Munger also said that BYD CEO Wang Chuanfu is special, calling him a genius and a workaholic. When asked if he would choose Tesla or BYD as an investment, Munger said the answer is simple.
“Last year, Tesla cut prices in China twice. BYD has raised its prices. We are direct competitors. BYD is so far ahead of Tesla in China … it’s almost ridiculous,” Munger said. BYD recently said it expects a record adjusted annual profit for 2022 of 16.3 billion yuan ($2.4 billion), about 1,200% higher than in 2021.
“Last year, BYD earned more than $2 billion after tax from the car business in China. It’s amazing what happened,” Munger said. “If you count all the factories they have in China to make cars, that would be a large percentage of the island of Manhattan, and no one has heard of it for years a few years ago.”
A longtime investor calls Tesla CEO Elon Musk talented — and “special.” He previously said that Musk’s success in the car market was “a minor miracle”.