But in 2008, he and partner Charlie Munger threw caution to the wind and invested roughly $230m into an unproven Chinese EV start-up called BYD (OTC:BYDD.Y). Munger was impressed by founder Wang Chuanfu, calling him a “combination of Thomas Edison and Jack Welch”. 

At the 2009 Berkshire Hathaway annual meeting, Buffett admitted that it might look like he and Charlie Munger had “gone crazy” investing in a little-known Chinese battery and EV company. It was certainly a break from tradition.

But this move turned out to be anything but crazy. In 2022, when Berkshire first started selling the 225m shares it had acquired, the investment was up more than 20-fold.

Over the weekend, it was reported that Berkshire has now fully exited its BYD position. According to CNBC, it had gone up roughly 3,890% since 2008!

To give a cricket analogy, I see Berkshire as the patient Test batter of investing, waiting for the right ball to safely score runs/returns. But with BYD, it swung like a T20 hitter and ended up smashing the ball straight out of the ground!

Eating Tesla’s lunch

BYD has made incredible progress in recent years. It has not just survived a ferociously competitive Chinese EV and plug-in hybrid market, but gone on to dominate it, leaving Tesla in the dust over there.

The company now has its eyes set firmly on global expansion. Factories in Thailand, Hungary and Brazil have sprung up, while others in Turkey, Indonesia and Cambodia are in the works.

I’m seeing more of its vehicles on the road in the UK. Indeed, at the weekend, my Uber driver said he was eyeing up a brand new BYD at what he considered a very attractive price. When I asked why not Tesla, he let out a long laugh.

According to the European Automobile Manufacturers Association, BYD’s vehicle registrations in Europe surged by 225% year on year in July. Tesla’s declined by 40%.

Should I buy BYD stock?

Tesla CEO Elon Musk has long warned about this competitive threat. In January 2024, he said that if no trade barriers are established, Chinese EV makers “will pretty much demolish most other car companies in the world. They’re extremely good.”

Now, this is where I’m cautious. Due to tariffs and the US-China rivalry, I don’t ever expect BYD to succeed in the US.

And while plants in Hungary and Turkey will circumvent EU tariffs on Chinese EVs, I expect BYD’s European margins to be significantly lower than cars for Chinese consumption. It still faces lots of domestic competition in Europe over the long run.

Meanwhile, production in China has fallen for two straight months, the first time that has happened since 2020. This might not matter long term, but it shows how even BYD isn’t immune to the brutal EV price war.

Weighing things up, I’m not going to invest due to these competitive risks.

But after falling 20% since May, the stock is trading at 16.5 times forward earnings. Unlike Tesla, that’s hardly a bonkers valuation, which could make BYD worth a closer look for investors.

The post Warren Buffett just sold this stock after a 3,890% rise! Should I buy it? appeared first on The Motley Fool UK.

This EV company has momentum

I’m not surprised BYD’s outperforming Tesla by a wide margin this year. For a start, the Chinese company has far more momentum than Tesla does right now. For the first half of 2025, the company sold 2.146m vehicles. That represented growth of around 33% year on year.

Looking at Tesla’s recent numbers, it delivered about 721,000 vehicles in the first half of 2025. That’s about 13% lower than the deliveries figure of 831,000 for the first half of last year.

International expansion

Secondly, BYD’s expanding internationally at a rapid rate. Of its 2.146m H1 sales, 470,000 were exports. That figure represents an increase of about 230% on the H1 figure last year. Note that in April, BYD outsold Tesla for the first time in Europe.

Stable management

Third, BYD has a very stable CEO in Wang Chuanfu. He’s a visionary leader with a brilliant track record, however he tends to maintain a low profile. By contrast, Tesla’s CEO Elon Musk – who is also a visionary leader – is making headlines all the time. And a lot of the time, they aren’t good for his company’s share price.

For example, earlier this week, Musk announced that he is planning to launch a new political party in the US. This sent Tesla stock down about 8% (investors want Musk to focus on Tesla not politics).

It’s worth noting that Charlie Munger, Warren Buffett’s late business partner, was a huge admirer of Chuanfu. “The guy at BYD is better at actually making things than Elon is,” he once said.

Which stock will outperform from here?

Can BYD stock continue to outperform Tesla in the years ahead? I think so. Today, the valuation on BYD looks far more attractive than the valuation on Tesla. Currently, the former trades on a trailing price-to-earnings (P/E) ratio of about 23 while the latter trades on a P/E ratio of about 144.

Of course, Tesla has its robotaxis (which are now on the road in the US). These could be a major growth driver for the company in the years ahead and send its share price up significantly (note that BYD also has self-driving technology called ‘God’s Eye’).

Meanwhile, BYD faces a few risks that could potentially lead to share price weakness. These include intense levels of competition in the Chinese EV market (where there’s a major price war) and EU and/or US tariffs on its exports.

Overall though, I see more potential in BYD today. I think the Chinese EV stock’s worth considering given the company’s momentum.

The post Warren Buffett’s electric vehicle stock is smashing Tesla shares in 2025 appeared first on The Motley Fool UK.

However, the FTSE 100 trust has recently been selling its once-massive holding. At the end of February, it made up just 0.8% of the portfolio. By now, it might even have dumped it altogether.

Investing in Tesla’s rival

By contrast, Scottish Mortgage has been buying shares of BYD (OTC: BYDD.Y) in recent months. At the end of March, the Chinese EV firm accounted for 1.8% of assets.

BYD’s become a bit of nightmare for Tesla. It’s the top-selling EV brand in China, the world’s largest EV market, and is quickly taking market share in Europe, Latin America, and South East Asia.

In 2024, BYD reported revenue of approximately $107bn (29% year-on-year growth), surpassing Tesla’s $97.7bn (up just 1%). BYD’s Q4 revenue and profits surged 53 and 73% respectively. In Q1, Tesla’s vehicle deliveries declined 13%.

BYD had 27% market share in China in January, compared to Tesla on 4.5%.

Foot on the gas

The Chinese firm is vertically integrated, even more so than Tesla, enabling in to churn out high-quality EVs and hybrids at very affordable prices. Its Seagull model starts at just $7,800 in China!

Moreover, it’s making major advances in battery technology. For example, it recently announced that its new systems can add 249 miles of range in just five minutes.

Then there’s its advanced driver-assistance technology, called ‘God’s Eye’. While this isn’t autonomous and seemingly not a threat to Tesla’s global robotaxi ambitions, BYD’s fitting it for free in most models in China.

At a time when its US rival’s sales and margins are under pressure, BYD’s aggressively stepping on the accelerator and taking market share. Indeed, with rising revenue, various innovations and a well-oiled manufacturing base, it looks like the EV firm’s beating Tesla at its own game.

Valuation

Yet, as is often the way with Chinese stocks, BYD’s cheaper. Right now, the forward price-to-earnings (P/E) ratio is around 20. This compares favourably with Tesla, which is trading at a sky-high forward P/E multiple of 90.

Given BYD’s strong growth rates, I see quite a lot of value in its stock, certainly relative to Tesla.

Risks

Naturally, there are risks with both. An economic downturn in Asia, caused by the US-China trade war, could put huge pressure on BYD’s sales across the region.

As for Tesla, reports say it has halted new orders in China for its US-made Model S and Model X cars due to the extreme reciprocal tariffs in place. This has the potential to further weaken Tesla’s competitive position in China.

According to Reuters, Tesla has also suspended plans to source components from China for its robotaxis. This may lead to even more delays launching its long-awaited robotaxi network.

Taken together, these issues could also impact the value of Scottish Mortgage’s holdings in BYD and — if it still owns it — Tesla.

However, I would personally rather buy shares of the FTSE 100 trust rather than either EV maker. Especially while it’s trading at a 9.5% discount to net asset value.

The post This FTSE 100 fund’s been selling Tesla stock and buying an EV rival instead! appeared first on The Motley Fool UK.

For those looking to invest in electric vehicles (EVs) and autonomous vehicles however, I think it’s worth considering another stock. This one’s held by legendary investor Warren Buffett, and today it trades at a far more attractive valuation than Tesla.

BYD’s sales are surging

The stock I’m talking about is BYD (OTC: BYDD.Y). It’s a Chinese EV manufacturer that has stock market listings in both China and the US.

You may have seen BYD’s EVs around in recent years. They are pretty slick, and becoming very popular with consumers. This popularity is illustrated by the company’s recent sales figures. In 2024, the company sold 1.76m EVs, an increase of about 10% year on year. Overall, it sold a record 4.3m vehicles in 2024, up 41% year on year.

As for Tesla, it sold 1.79m cars in 2024 (all EVs), a decrease of about 3%.

Here in the UK (where it launched its EVs in March 2023), BYD sold 9,271 cars in the first quarter of 2025. That figure exceeds the company’s entire 2024 UK sales volume. So its cars are clearly popular with Britons. Turning to Tesla, its UK sales have been weak this year – in January they were down 7% year on year.

Zooming in on revenues, BYD’s are surging. For 2024, its top line jumped by 29% to CNY777bn ($107bn). This topped the $97.7bn reported by Tesla. Note that Tesla’s 2024 revenue was only up 1% year on year.

A lot to be excited about

Looking ahead, there are plenty of reasons to be bullish. Recently, BYD launched a low cost model (the Qin L) to take on Tesla’s Model 3. Meanwhile, earlier this year the company launched new battery charging technology, which can charge an EV in just five minutes. It also announced that its advanced driver-assistance technology (‘God’s Eye’) would be available free in all its models.

Low valuation

Perhaps the best thing about BYD stock however, is its valuation. Currently, it trades on a price-to-earnings (P/E) ratio of 25, falling to 21 using next year’s earnings estimate. That’s a much lower valuation than Tesla has, which is currently trading at 98 times this year’s forecast earnings and 73 times next year’s.

So on a relative basis, there appears to be a lot of value here.

Risks to consider

Of course, there are plenty of risks to consider with BYD. One is competition from other manufacturers. Today, pretty much every major auto manufacturer is producing EVs and competition’s intense.

Another is tariffs. EU tariffs on its passenger cars, and US tariffs on its buses and trucks could hurt profits. A major global recession is another risk. When economic conditions weaken, consumers tend to hold off on the purchase of new vehicles.

All things considered however, I think this stock has a lot of potential and is worth looking at. For me, it’s a safer bet than Tesla.

The post Looking at Tesla stock? Consider this Warren Buffett-held EV rival instead appeared first on The Motley Fool UK.

Value investing is a strategy that involves picking stocks that appear to be trading for less than their intrinsic or book value. So why isn’t Buffett buying shares in Tesla (NASDAQ:TSLA)?

The Elon Musk firm has seen $700bn wiped off its market value over the past 18 months, most of it in the past four months. Maybe this electric vehicle (EV) giant is still too expensive.

Valuation

Buffett’s preferred EV stock isn’t Tesla. The US investor backed BYD in 2008, and the decision appears to have been a good one.

The veteran investor says he only invests in sectors and companies that he understands. As he invests in BYD, I think it’s fair to say he knows the industry. So this can’t be the reason he hasn’t invested in Tesla.

Looking specifically at the last year, BYD — a Chinese automotive firm with a heavy leaning towards the EV market — has fallen 15%. But that’s nothing compared to its peers. Tesla stock is down 65% over 12 months.

And despite Tesla’s huge sell-off, it’s still more expensive that BYD, according to several metrics. For example, Tesla has an EV-to-sales ratio of 4.58 versus BYD’s 2.04.

However, according to earnings-related metrics, Tesla and BYD share similar valuations. The EV-to-EBITDA ratio of Tesla is 21, while BYD’s is 26. In fact, here, BYD appears more expensive. So maybe valuation isn’t the reason?

Well, there’s plenty of uncertainty about Tesla’s earnings going forward. Growth is slow and margins are coming under pressure. That’s very concerning for investors and it makes the above calculations slightly meaningless. 

Tesla had boosted the best margins in the sector, but with price cuts in the US and extended sales incentives in China, margins are likely to come under substantial pressure. Despite these incentives, Tesla still missed its delivery targets in the final quarter.

As a value investor, Buffett looks for companies that are undervalued and offer him a margin of safety. And with concerns about Tesla’s performance over the next few years, valuation could well be the issue.

Could there be another reason?

Buffett tends to invest in stable and occasionally unexciting companies. I’d wonder if Musk might be a little too ‘eccentric’ for the 92-year-old investor. After all, Musk once said that he thought his own company was overvalued. Some will say he’s a genius, but he’s probably partially responsible for the volatility we’ve seen this year.

It’s also worth considering that now might not be the right time for Buffett. In a baseball analogy, he once said that “the trick in investing is just to sit there and watch pitch after pitch go by and wait for the one right in your sweet spot. And if people are yelling, ‘swing, you bum!’ ignore them“. 

In other words, Tesla might not be in that sweet spot right now.

For me, I’m keeping a close eye on Tesla but at it’s current price, it’s not for me. I think there a several Chinese EV companies — including NIO and Li Auto — that look more promising investments.

The post Warren Buffett isn’t buying Tesla shares despite the huge sell-off. Why is that? appeared first on The Motley Fool UK.