Warren Buffett’s Berkshire Hathaway has again raised eyebrows with another selldown of shares in the world’s biggest electric vehicle maker (and second biggest battery group) BYD.
Just as BYD moved past Tesla to become a global EV major and to dominate the Chinese market in 2022, the world’s biggest, the legendary Buffett became a consistent seller of the company’s shares late in the year.
The selling resumed on the first trading day of the year and was revealed in a regulatory filing in the US earlier this week.
It showed that Berkshire sold 1,058,000 BYD shares in Hong Kong on January 3. The sale cut Berkshire’s BYD stake to a still high 13.97%.
Berkshire sold those BYD shares at an average trading price of HK$191.44, or $US24.52, meaning the company cashed in about HK$200 million or nearly $US26 million) from the sale.
Berkshire last sold BYD’s H shares on December 8, 2022, when it sold about 1.33 million shares, reducing its stake from 15.99% to 14.95%.
That was after sales on August 24, 2022, September 1 and in July.
The BYD stake first appeared in September 2008, when Berkshire Hathaway Energy, a subsidiary of Berkshire, spent $2US30 million to purchase 225 million shares of BYD at a price of HK$8 per share (or just over $US1).
Berkshire has sold into a falling market for BYD shares which are down about 39% in Hong Kong from its 2022 peak last June.
The consistent selling by Berkshire though has added to the weakness, which seems a strange move from Buffett’s company – it’s as though they want to drive down the price with small sales every now and then.
So far Berkshire has sold around a third of that original 225 million shareholding.
Despite dethroning Tesla as the top seller of EVs since the second quarter last year, the stock fell due mainly to the Covid lockdowns and factory disruptions experienced before Beijing abandoned its zero-Covid policy
BYD’s fortunes though have recovered, selling a record 235,197 new energy vehicles (NEVs) in December and bringing cumulative full-year 2022 NEV sales to an all-time high of 1,863,494 units.
NEVs include battery EVs and plugins (hybrids.).
BYD stopped production and sales of vehicles powered entirely by internal combustion engines in March of last year to focus on the manufacture of plug-in hybrids and battery-powered electric vehicles which are now its major product and that of the Chinese NEV industry.
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Meanwhile Chinese retail sales of NEVs (new energy passenger vehicles) hit a record 640,000 units in December, up 35.1% year-on-year and up 6.5% from November, according to data released this week by the China Passenger Car Association (CPCA).
The CPCA said sales of NEVs and traditional internal combustion engine vehicle were affected by Covid controls in some regions in early December, with many stores temporarily closed, so sale figures fell short in some parts of the country.
The surge in November and December (more than 1.2 million NEVs in the two months) was due to the ending of purchase subsidies at December 31 (There is still one small subsidy in place).
Battery electric vehicles (BEVs) again accounted for the majority of NEV sales, with retail sales of 455,000 units in December, or 71.1% of all NEV sales.
Plug-in hybrid vehicles (PHEVs) accounted for 185,000 retail sales in December, or 28.9% of all NEV sales and a share that has steadily contracted.
China’s retail sales of all passenger vehicles in December were 2.17 million units, up 3 percent year-on-year and up 31.4 percent compared to November.
Retail sales of all passenger vehicles in China were 20.54 million units in 2022, up 1.9% year-on-year. Overall sales would have fallen sharply without the rising volumes of NEVs sales.
This implies a 27.6% penetration of new energy passenger vehicles in China in 2022.
For the full year 2022, China’s retail sales of new energy passenger vehicles were 5.67 million units, up 90% year-on-year. BYD had more than 1.8 million of those sales last year, or more than 30%.
