Elon Musk shared a throwback on X, recalling a 2009 lunch where legendary investor Charlie Munger told a table full of people that Tesla was destined to fail. Musk, always blunt about Tesla's early struggles, admitted at the time that the odds were stacked against the company.
But despite Munger's doubts, Musk pushed forward. Years later, even Munger had to admit that Tesla's success was nothing short of a "minor miracle."
Yet, for all his skepticism about Tesla, Munger wasn't against all electric vehicles. In fact, he was one of the biggest advocates for BYD, a Chinese EV and battery manufacturer that Berkshire Hathaway backed. Munger raved about BYD's achievements, calling it his "best investment" shortly before his death in 2023.
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The Genius Who Overestimates Himself
Munger's views on Musk were always a mix of admiration and caution. At the 2014 Daily Journal shareholders meeting, he acknowledged Musk's intelligence but also pointed out his tendency to push the limits of reality.
"He's a genius, and I don't use that word lightly," Munger said. "He's also one of the boldest men who ever came down the pike. So put me down as saying I've always been afraid of the guy whose IQ is 190 and he thinks it's 250." He elaborated, "I like to think there's a little of that risk with Elon. He is a certified genius."
By 2020, Munger hadn't changed his stance much. At the Daily Journal shareholders meeting that year, he made it clear that while he wouldn't bet against Musk, he wasn't buying Tesla stock either. "My thoughts are two," Munger said. "I would never buy [Tesla], and I would never sell it short."
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Then came his now-famous warning: "Never underestimate the man who overestimates himself."
Munger acknowledged that Musk's confidence bordered on delusion—but sometimes, those delusional thinkers change the world.
Munger Loved BYD but Snubbed Tesla
If Munger was so skeptical of Tesla, why was he all-in on BYD? In short, he saw BYD as a company with strong fundamentals, disciplined leadership, and a clear business strategy.
At the 2009 Berkshire Hathaway annual meeting—the same year as his notorious lunch with Musk—Munger marveled at BYD's rapid ascent, labeling it "unbelievable."
"They went into the automobile business with zero experience, very little capital, and they still created the best-selling model in China. This is not normal. This is a damn miracle," he said.
Munger saw BYD as a disciplined company that methodically built itself up, while Tesla, in his eyes, was fueled by Musk's relentless overconfidence.
The Legacy of Munger's Tesla Criticism
Tesla has had its ups and downs since that 2009 lunch. It defied the odds to become a global powerhouse, but in 2025, it's facing a sharp decline. Tesla's stock has dropped nearly 50% since mid-December, with analysts pointing to a mix of factors, including Musk's divisive political stances, declining global sales, and increased competition in the EV market. Some investors, like Ross Gerber, believe the company could face further struggles, while others see long-term opportunities in Tesla's robotaxi ambitions and AI-driven projects.
Munger remained consistent in his skepticism of Tesla throughout his life. His stance wasn't necessarily about Tesla's technology—it was about his investment philosophy, which prioritized stable, disciplined companies over high-risk ventures led by larger-than-life personalities.
While Tesla's future remains uncertain, Munger's perspective on Musk—a genius who overestimates himself—continues to be a defining lens through which many view the billionaire today.
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