Warren Buffett Cuts Stake in China’s BYD to Less Than 6%

Investment mogul Warren Buffett has quickened the reduction of his stake in Chinese electric vehicle-maker BYD, selling holdings in the firm twice this month.

Buffett-owned investment group Berkshire Hathaway cut its stake in BYD’s H-shares to 5.99% on June 19, according to a filing with the Hong Kong stock exchange on Tuesday.

The stake had been 7.02% as recently as June 11.

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Effectively, Buffett’s holdings in the carmaker are down more than 70%.

Hong Kong requires larger shareholders to disclose sales when their resulting stakes fall below whole percentage numbers. Berkshire may cease disclosing BYD sales after its ownership stake falls below 5%.

Berkshire had acquired 225 million BYD shares in 2008, giving it a 7.73% stake — equal to a 20.49% stake in the firm’s H shares. The company paid $232 million for the shares.

The value of the Berkshire’s holdings grew to about $7.5 billion by August 2022 — when the firm first started trimming its stake in the EV-maker.

BYD’s share price had risen more than 20-fold and hit a record high at that time. But the price has fallen about 28% since then.

Charlie Munger, Berkshire’s late vice chairman, spearheaded the BYD investment, and Buffett has given him full credit. Berkshire invests mainly in the United States.

Buffett’s share sales come at a time of increasing technology and trade tensions between the United States and China. Last year, the investment mogul voiced concern about bilateral relations, and hinted at discomfort about investments exposed to risk from the deteriorating ties.

Meanwhile, BYD — short for Build Your Dreams — has continued to grow its profits and expand reach in markets across Europe and Southeast Asia.

The EV-maker surpassed Elon Musk’s Tesla last year as the world’s largest electric vehicle maker. Tesla regained the top spot in the first quarter.

BYD’s Shenzhen-listed shares have risen more than 21% over the past month.

Reuters, with additional editing by Vishakha Saxena

Vishakha Saxena

Vishakha Saxena is the Multimedia and Social Media Editor at Asia Financial. She has worked as a digital journalist since 2013, and is an experienced writer and multimedia producer. As a trader and investor, she is keenly interested in new economy, emerging markets and the intersections of finance and society. You can write to her at [email protected]