Buffett's Berkshire Hathaway Reduces Stake In Tesla Rival BYD Below 5% To Shift Focus To US: Report

Warren Buffett’s Berkshire Hathaway Inc BRK has reduced its stake in BYD Company BYDDY, China’s largest electric vehicle maker, to below 5%, marking a continued shift in focus towards U.S. investments for the Omaha, Nebraska-based conglomerate.

Berkshire recently decreased its holding in BYD to 4.94% from 5.06%, selling 1.4 million H shares at an average price of 246.96 Hong Kong dollars (approximately $31.64) per share, reported The Wall Street Journal.

Dropping below the 5% threshold means Berkshire is no longer required to disclose its sales of BYD stock on the Hong Kong stock exchange.

Following the news, BYD shares fell 3.1% in Hong Kong and 4.7% in Shenzhen on Tuesday. Despite this, Hong Kong-listed shares of BYD have risen about 11% this year, while its China-listed shares are up about 28%.

Berkshire has been gradually reducing its stake in BYD since August 2022, when the shares hit a record high. Initially, Berkshire’s shareholding exceeded 20%, peaking at nearly 40% in 2008.

Also Read: Tesla Rival BYD Strengthens Smart Driving Tech With Former Baidu Executive: Report

BYD is reportedly poised to significantly increase its market share in the battery electric vehicle (BEV) sector in 2024.

BYD reported a 21% increase in electric vehicle sales for the second quarter, selling 426,039 EVs from April to June.

In May, Buffett revealed that his late business partner, Charlie Munger, had advocated for the initial investment in BYD.

However, Berkshire now plans to prioritize U.S. investments. Earlier in 2023, Berkshire sold its entire stake in Taiwan Semiconductor Manufacturing Company Ltd TSM.

The report cited Nomura analyst Joel Ying, who noted that intense competition in China’s EV market likely influenced Berkshire’s decision to trim its BYD stake.

Price Action: BYDDY shares closed higher by 1.77% at $63.15 on Monday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image via Shutterstock

Read Next:

• Tesla Rival BYD’s Thai Distributor Faces Ongoing Investigation Over EV Discounts