Munger Warned BYD Away From ‘Graveyard’ Car Business
Berkshire Hathaway's vice chairman wasn't convinced EVs were a good idea, but he knew the BYD founder was a good bet.
Keeping the faith.
Photographer: Kentaro Takahashi/BloombergBYD Co. is on the cusp of overtaking Tesla Inc. as the world’s biggest electric-vehicle maker, spurring analysts and investors to show renewed enthusiasm for the company. Yet one of its biggest backers wasn’t entirely convinced that a move from the mobile-phone sector into autos was a smart idea, and suggested founder Wang Chuan-fu think it through.
Berkshire Hathaway Inc. bought around 10% of Shenzhen-based BYD in September 2008 for $230 million, betting in large part on Wang’s engineering skills. At the time, BYD was best known for making handset components including their rechargeable batteries, but Berkshire leaders Warren Buffett and Charlie Munger saw the investment as a chance to tap into rising global demand for environmentally friendly technology. Wang had bought struggling state-backed Qinchuan Automobile Co. in 2002.