Warren Buffett reportedly rakes in $1B profits on BYD in less than one year
by Jeremy Korzeniewski on Aug 4th 2009 at 10:01AM 
2009 BYD F3DM - Click above for high-res image gallery
You don't get to hold the title of The Richest Person in the World – a title oft-owned by either Bill Gates or Warren Buffett at any given time – without knowing how to make sound financial decisions. While not all of Warren Buffett's investments end up raking in tons of money, his procurement of a ten-percent stake in Chinese automaker BYD less than one year ago has already earned his Berkshire Hathaway Inc. some $1 billion.
Driving the rapid rise in BYD's value are its investments in hybrid automobiles like the plug-in F3DM and, even more importantly, high-tech lithium iron phosphate batteries. A recent partnership with Volkswagen and possible tie-ups with Ford and others have proven the worth of that energy storage technology for automotive use and the company is already China's largest producer of rechargeable batteries for portable electronics.
BYD Chief Executive Officer Wang Chuanfu has publicly stated his company's plan to more than double global sales this year with new models and additional export deals, which could include the United States as early as 2011. With all of this in mind, it shouldn't come as a surprise that Buffett bolstered his investment Sunday night by acquiring an additional 225 million shares of BYD stock.
Gallery: 2009 BYD F3DM plug-in hybrid
[Source: Bloomberg]
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Reader Comments (Page 1 of 2)
liquidretro 10:07AM (8/04/2009)
I saw one of the BYD cars at the Berkshire Hathaway annual meeting this year and it was an actual respectable looking auto. You would never guess that it was made by a Chinese upstart. The styling is nothing to write home about but it looks like a functional small car.
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Epyx 10:40AM (8/04/2009)
I saw the vehicle there as well. Sort of cheap looking but very respectable. The most interesting aspect of the car is the near 100% in house production of the components, less the tires and glass. Pretty impressive.
The modular housing display was also impressive this year.
Throwback 1:00PM (8/04/2009)
Has anyone actually driven one of their cars? I have not seen any independent tests of the car.
dal20402 10:09AM (8/04/2009)
Copyrolla (at least the styling). They didn't even bother trying to obfuscate it.
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jon 10:33AM (8/04/2009)
its never a bad idea to invest in a chinese company that chooses to imitate the best selling car in the world
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Epyx 10:43AM (8/04/2009)
Its not really about the car itself. The technology within the car is what is valuable. You miss the whole point if your are focusing on the sheet metal.
jon 10:45AM (8/04/2009)
you miss my whole point if you didnt realize i was kidding around...
Bloke 10:50AM (8/04/2009)
Here's what's a good idea: you're BYD or Nissan, you quietly and reverently produce a hybrid, EV or other alternative-fuel car and soon bring it to market.
Here's what's a bad idea: you're General Motors, you produce a working prototype of such a vehicle, you waste money constantly changing your mind over where it'll be built, its timeline for production, specifications, who will build the power source, etc. You then obtain enormous government loans, waste more money publishing photos with your execs and other employees standing around said prototype holding placards emblazoned with "we're green" and "we're here to stay" and practically every other form of hype short of a sousaphone band on a trolley ... and eons later you still don't have a production-ready vehicle.
Luis 10:52AM (8/04/2009)
Bloke - great assessment of the Volt. I'm sick of hearing about it already.
Epyx 11:10AM (8/04/2009)
Good point - except for the fact that the BYD and the Nissan EV do not have widespread availability for purchase. The BYD is available in China only and is not ready for sale anywhere else in the world. Is the Nissan available in Japan? - ABG only mentioned the US. "While Nissan promises to deliver the Leaf to its first American customers in late 2010, it isn't immediately clear where it will be made available, to whom, and how."
Anyway the BYD investment is about the batteries and components, not so much the car. The car is only there to showcase the potential of the real technology within.
why not the LS2LS7? 11:18AM (8/04/2009)
And the BYD F3DM has been a bust-out so far too. They expected to sell 10,000, and they've sold something like 100 and most of them to fleets.
Bloke 11:27AM (8/04/2009)
"The BYD is available in China only and is not ready for sale anywhere else in the world. Is the Nissan available in Japan? - ABG only mentioned the US."
Autocar reported yesterday that the Leaf will first debut next year in Japan and the US, and across the European market by 2012. BYD only currently sells the F3 hybrid in China - but let's not forget that market in itself is by no means small.
The point was that regardless of market, other manufacturers haven't hyped their hybrid/EV vehicles to such ridiculous levels.
Epyx 11:33AM (8/04/2009)
"The point was that regardless of market, other manufacturers haven't hyped their hybrid/EV vehicles to such ridiculous levels."
Point taken - GM does like to hype products to death.
why not the LS2LS7? 12:07PM (8/04/2009)
Someone who thinks other companies don't hype their hybrids as much hasn't seen the US Prius ads recently.
Bloke 1:17PM (8/04/2009)
"Someone who thinks other companies don't hype their hybrids as much hasn't seen the US Prius ads recently."
The difference is that the Prius has been in production for more than eleven years. To waste taxpayers' money by having your employees standing around a over-hyped prototype chanting "we're here to stay" for a press photo has quite the opposite effect to advertising.
But I'm sure you'll find a way to turn this into a (boring) domestic v import argument.
Will 7:35PM (8/04/2009)
"The 19th century belonged to England, the 20th century belonged to the US, and the 21st century belongs to China. Invest accordingly." - Warren Buffett
the4thheat 9:36PM (8/04/2009)
lol the BYD only being available in China is a legitimate critique?
You're right that it's not available in the US but uhh...none of their other cars are available in the US either. And their plugin hybrids are available in their largest market (aka their home market of China)...so it's not like they're only selling it Tanzania.
Truth be told though the dual mode hybrids actually ended up being a great halo car for BYD because that's basically the reason why the F3 shot up to being the best selling car in China. It was around long before they launched the F3DM but the F3DM gave the company the claim to being a technology leader which boosted sales of the much cheaper F3 by like a bazillion percent.
So whether the hybrids are even all that great is besides the point. The fact that Buffet invested in the company gave it the legitimacy that helped it sell more cars, period. Really Warren Buffet is basically writing his own checks here-by investing in the company he doubled it's sales of F3's.
davin.peterson 11:04AM (8/04/2009)
That car looks like the Toyota Corolla
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webcrawler 11:13AM (8/04/2009)
Its not the car its the technology.
this BYD guy started his business by borrowing money (not much) from his family (grandfather? or aunt?)
Warren Buffet knows where to put his money.
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RMN 4:32PM (8/04/2009)
I always think this too.
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