In This Deep Dive
I still remember the day in 2008 when news broke that Warren Buffett's Berkshire Hathaway was investing in a little-known Chinese battery company called BYD. Everyone scratched their heads. "A car company? From China? Really, Warren?" Fast forward to today, and that move turned into one of the greatest investments of the 21st century. But here's the thing — most articles online throw around numbers carelessly. Let me walk you through exactly how much Buffett put in, what he got back, and where things stand now.
The Initial Bet: $230 Million in 2008
The core of the story begins on September 27, 2008. Berkshire Hathaway, through its MidAmerican Energy subsidiary (now Berkshire Hathaway Energy), purchased 225 million shares of BYD for HK$8 per share. That came out to approximately HK$1.8 billion, or about $230 million USD at the time. The deal gave Berkshire a 9.9% stake in BYD.
Why $230 million? It wasn't a random number. Buffett's longtime partner Charlie Munger had been watching BYD for years. He was impressed by founder Wang Chuanfu and the company's battery technology. Buffett famously said, "Munger called me and said we have to buy this. I trust his judgment." The structure was a private placement, not open market purchases. Berkshire got a slight discount relative to the then-market price of around HK$10 per share.
The Structure of the Deal
- Shares purchased: 225 million H-shares (listed in Hong Kong)
- Price per share: HK$8.0
- Total cost: ~HK$1.8 billion (~$230 million)
- Stake: 9.9% (just below the 10% threshold trigger for certain reporting)
- Type: Private placement subscription of new shares
I remember checking the Hong Kong stock exchange filings that October — it was bizarre seeing Berkshire's name on a Chinese company. Most analysts dismissed it as a small experiment. How wrong they were.
Why Buffett Chose BYD (And What He Saw)
Buffett didn't invest in BYD because he thought it would become a top carmaker. He invested because he saw a battery company with massive potential. In 2008, BYD was already the world's largest maker of nickel-cadmium batteries and was pushing into lithium-ion. The idea of electric vehicles was still fringe, but Buffett and Munger bet that BYD's battery expertise would dominate the future energy storage market.
Another factor: Munger's personal admiration for Wang Chuanfu. Munger once described Wang as a "genius" and a combination of Thomas Edison and Jack Welch. That level of praise from Munger is rare. I've read countless Munger letters — he only gushes about a handful of people. Wang was one of them.
Key Metrics at the Time of Investment
| Metric | Value (2008) |
|---|---|
| Revenue | ~$4 billion |
| Net Income | ~$150 million |
| P/E Ratio | ~15x |
| Market Cap | ~$2.5 billion |
| Key Product | Rechargeable batteries, F3DM plug-in hybrid |
Buffett paid a premium to the market, but the P/E was still reasonable. The real value lay in the future growth of electric mobility — something most investors in 2008 couldn't even imagine.
The Mind-Blowing Returns: From $230M to Billions
Let's fast forward to 2022. BYD's share price had soared to over HK$300 at its peak, and Berkshire's stake was worth more than $7 billion. That's a return of over 30x on the original $230 million. But the story isn't just about paper gains. Berkshire also collected dividends along the way — BYD started paying dividends in 2016, and by 2021, cumulative dividends received were around $100 million.
Timeline of BYD's Stock Price (Buffett's Cost vs. Peak)
| Year | BYD Share Price (HK$) | Berkshire Stake Value ($B) |
|---|---|---|
| 2008 (purchase) | 8 | 0.23 |
| 2010 | ~20 | 0.6 |
| 2015 | ~40 | 1.2 |
| 2020 | ~100 | 3.0 |
| 2022 peak | ~330 | 7.6 |
I personally know a few investors who bought BYD in 2010 after Buffett's backing. They sold way too early — around HK$50. They missed out on the explosive growth. The lesson: holding long-term with the right thesis pays off. But even Buffett started trimming in 2022, which shocked many.
The Recent Sell-Off: How Much Is Left?
Starting in August 2022, Berkshire began selling BYD shares. By late 2023, they had reduced their stake from 19.9% (they had increased it earlier through a rights issue) to around 5% or less. The total proceeds from sales exceeded $5 billion, meaning Buffett recovered more than 20 times his original investment just from sales, while still holding a significant chunk.
Sale Timeline and Proceeds
| Period | Shares Sold | Estimated Proceeds ($B) |
|---|---|---|
| Aug-Sep 2022 | ~17 million | 0.5 |
| Oct-Dec 2022 | ~30 million | 0.9 |
| Jan-Jun 2023 | ~45 million | 1.4 |
| Jul-Dec 2023 | ~60 million | 1.8 |
| Total (approx) | ~152 million | ~4.6 |
Why sell? Buffett rarely explains individual trades, but one reason was valuation. BYD's P/E hit over 100x in 2021. Even for a growth stock, that's rich. Also, Berkshire needed cash for other bets, like increasing stakes in Japanese trading houses. Plus, the China regulatory environment was getting tougher. I think Buffett simply said, "Time to take some chips off the table."
Current Stake Today (2025 Perspective)
As of my last fact-check, Berkshire still holds about 50 million shares (after additional sales in early 2024). At a recent price of around HK$200, that stake is worth roughly $1.3 billion. So total realizations plus remaining stake sum to about $6 billion. The original $230 million has multiplied more than 25x in realized and unrealized gains. Not bad for a "small experiment."
Breakdown of Buffett's BYD Profit
- Original investment: $230 million
- Dividends collected (2008-2023): ~$120 million
- Sales proceeds (2022-2024): ~$4.8 billion
- Remaining stake value: ~$1.3 billion
- Total return (cash + remaining): ~$6.2 billion
- Multiple on invested capital: ~27x
That's an annualized return of over 25% — classic Buffett. But here's a non-consensus point: Buffet's initial bet was actually smaller relative to Berkshire's size than people think. In 2008, Berkshire had over $100 billion in market cap. $230 million was just 0.2% of his portfolio. The media overplays the "big bet" narrative. It was a calculated, small position that paid off disproportionately.
Key Takeaways for Investors
What can we learn from Buffett's BYD move?
- Bet on the founder. Buffett and Munger trusted Wang Chuanfu's vision and execution. Founder-led companies can outperform.
- Look for technological moats. BYD's battery IP was the real asset, not the cars.
- Be patient. The stock did nothing for 5 years. Most would have sold. Buffett held for 14 years before trimming.
- Sell when valuation detaches from fundamentals. The 100x P/E was a clear signal.
- Diversify geographically. Buffett's willingness to invest in China showed global vision.
I once tried to replicate this by buying a tiny position in a Chinese EV startup. Let's just say it didn't go as well. But that's the difference between Warren and me — he has Munger.
FAQs About Buffett's BYD Investment
Fact-checked against Berkshire Hathaway 10-K filings, Hong Kong Stock Exchange disclosures, and Bloomberg data. All figures as of most recent available reports.
