How Warren Buffett got ahead of the global EV sell off

Berkshire Hathaway ended its 17-year investment in BYD just after shares peaked last year

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BYD’s first Dolphin Mini rolled off the line at the carmaker’s new factory in Camaçari, Brazil last year.

It might have been Warren Buffett’s final lesson in hard knocks for investors before he retired at the end of last year.

Last June, only one month after shares of Chinese EV maker BYD BYD 0.00%↑ peaked in Hong Kong at about $HK155 ($19.83), Buffett’s Berkshire Hathaway (BRK.B) completed the sale of a 17-year stake in the company. At the time, reports said Berkshire made about a 30% annualized return on its initial investment of $230 million for a 10% stake in the company, realizing gains of more than $7 billion.

Almost immediately, BYD shares started to slide, even as the company was capitalizing on an international investment strategy to take advantage of the pullback in U.S. electric vehicles made worse by President Donald Trump’s White House hostility to climate investments. As BYD grew market share in Europe, South America and lately, made inroads in Canada, its shares continued to slide.