With BYD being a manufacturer of the electric cars and batteries some investors are claiming that it only makes sense to invest in this company. Other investors are saying that the stock is too high. When it comes to this stock Berkshire Hathaway Warren Buffet’s holding company has stood by it through all of its ups and downs.
In 2008 Berkshire bought 225 million shares in the car company. Even with its lows, it is still climbed 480%. The stock is now worth over $1.5 billion.
Charlie Munger who is Warren Buffet’s investing partner is pushing Americans to check out the opportunities available in China. Warren Buffet gives Munger all the credit for Berkshire’s purchasing of this stock.
BYD which stands for Build YOur Dreams is a company that manufactures batteries as well as electric cars. While it is a Chinese company it opened another headquarters in Los Angeles in 2011. There are even regional transportation authorities that use cars manufactured by BYD,
What makes this company so popular is China’s announcement of banning the manufacturing of vehicles that are powered by fossil fuels. With China placing a ban on these cars Beijing wants companies there at home to benefit from the sales of electric vehicles.
China plans on the greatest percentage of sales for cars to be from the sale of electric cars. They plan on it being at least 70% of cars sold by the year 2025.
One of the reasons that Munger likes this company is because of its manufacturing of lithium batteries. BYD is one of the main manufactures of this rechargeable battery. These batteries went into cell phones. Since the company had such a huge success in these batteries it decided to go into the manufacturing car business.
One of the problems with Berkshire’s investing in China companies is the restriction on foreign investment. While Berkshire was only able to purchase ten percent of BYD it would gladly purchase more if it could.