Excellent news for the Chinese electric car manufacturer BYD, and therefore also for Warren Buffett: the EV giant made in China, which confirms that it is a respectable threat to Elon Musk’s Tesla, which sees Buffett’s name stand out among its major shareholders, said they sold 61,409 new vehicles in August, more than four times the amount sold in the same month last year, thanks to the strength of demand for electric cars in China, the number one car market. one in the world. Sales of electric battery vehicles and so-called plug-in hybrids were sold almost equally. The jump in sales of + 300% year-on-year gave BYD shares wings, which flew more than 7% on the Shenzhen Stock Exchange.
BYD is among the largest electric car makers in China, although several start-ups including Nio, Li Auto and XPeng are giving it a hard time. That said, these three companies still remain smaller than BYD, and all delivered fewer than 10,000 vehicles in August, a CNBC article notes. However, the article also points out that the comparison is not necessarily appropriate given that the three start-ups in the EV world release data on deliveries to customers, while BYD publishes data on sales. Focus on the stock, which has flown by 225% in one year, jumping 35% from the beginning of the year. On an annual basis, Tesla is up by more than + 75% and by 3.95% since the beginning of 2021.
Founded in 1995 by billionaire Wang Chuanfu, BYD is one of China’s EV pioneers and is riding a wave of demand for clean vehicles. Born as a manufacturer of rechargeable batteries, BYD is now China’s largest automaker by market value and raised $ 3.8 billion from the sale of new shares in January to accelerate the replacement of gasoline or diesel-powered vehicles with vehicles that new energy and smart cars. By early 2021, before the strong retracement of recent months that hit all EV stocks, BYD had risen to be the third largest automaker in the world by market value behind only Tesla and Toyota, as well as being the largest manufacturer. world of electric buses.
Of course, for the auto industry this is definitely not a good time, considering the problem of the lack of chips that is besieging the sector and the continuing pandemic, with the spread of the Delta variant that continues to scare the whole world. In the note with which the company disclosed its August sales numbers, BYD made no mention of the issue but in the financial statements for the first half of the year released last month, the group had said that “profitability is conditioned in some way by factors that include the increase in the prices of raw materials ”. However, despite the problems affecting the car world, the demand for electric cars continues to rise in China, thanks to the support that also comes from the Beijing government, so much so that according to Reuters, the Chinese Deputy Minister of Industry and of IT said last Saturday that China’s estimates for the first eight months of the year are for a sale of 1.7 million new electric vehicles, up sharply from the 600,000 cars sold in the same period of 2020.
At the same time, news arrives that surprises the company: according to some sources, Samsung Electronics has divested a share of its 1.6% that it holds in BYD, for a value of 1.5 trillion won, the equivalent of 1.3. billions of US dollars. To the smartphone giant, a 0.3% stake in the electric car group would reappear.
As for Buffett, the Omaha Oracle will be rubbing his hands instead, toasting his umpteenth success in the investment world. The fact that he said he is not interested in investing in Tesla does not mean that the billionaire investor is not interested in the EV sector. And, indeed, as Anjani Trivedi wrote in a recent article published on Bloomberg Bloomberg, “the value of Berskshire Hathaway’s holdings has flown this year: BYD stock is up by almost 30%. Buffett has supported BYD for nearly 10 years, holding approximately 22% in the Hong Kong-listed company, which now has a market capitalization of over HK $ 915.6 billion, the equivalent of US $ 117.6 billion.