Yahoo Finance: Supporting Elon Musk .. Warren Buffett reduces ‎his holding in Chinese BYD

Berkshire Hathaway has reduced its stake in the Chinese automaker, BYD, following the statements of its CEO, Warren Buffett, and his deputy, Charlie Munger, that they do not want to compete against Elon Musk, CEO of the American electric car maker, Tesla.

Berkshire cut its stake in Chinese electric car maker BYD last week for the 11th time in less than a year. The sale of shares came just days before Warren Buffett and Charlie Munger announced that they did not want to compete with Elon Musk.

Berkshire has sold nearly 2 million shares and currently owns just under 10% of BYD, which rivals Tesla as the world’s largest manufacturer of electric cars. Berkshire’s current stake in BYD is worth just over $3 billion. According to a regulatory filing, the sale in BYD shares took place on May 2nd, just days before Buffett and Munger said at Berkshire’s annual shareholder meeting that they did not want to compete against the Tesla CEO.

“We don’t want to compete with Elon on a lot of things,” Buffett said, according to Yahoo Finance. “We don’t want that kind of failure,” Munger quickly added, in response to Buffett’s comment. The comments came in response to a question about whether the two investors think Elon Musk is overestimating himself. The duo responded that while Musk may overestimate himself, he is an incredibly talented person with a “brilliant mind” who has achieved so much success, likely because he overestimated himself. “He wouldn’t have achieved what he has in life if he hadn’t tried unreasonably extreme goals,” Munger said. He loves to take on the impossible task and do it

According to the site, Berkshire originally bought its stake in BYD in 2008 for only $232 million. In late 2021, Berkshire owned about 21% of BYD, according to Hong Kong regulatory filings, which at its peak last year was worth more than $7 billion.

Despite the comments about Elon Musk from the legendary duo, their continued sale to BYD is likely more about making a profit and redistributing the money elsewhere rather than unwillingness to compete with Musk in the electric car business.