Warren Buffett's Berkshire Hathaway (BRK-B, BRK-A) is cutting its stake in Chinese EV maker BYD Company (1211.HK, BYDDY) after selling nearly $40 million worth of BYD stock.

Catalysts Anchors Madison Mills and Seana Smith report on Berkshire Hathaway's BYD holdings and the international competition between Chinese manufacturers and other overseas auto makers, like Tesla (TSLA).

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Luke Carberry Mogan.

Video Transcript

Berkshire halfway continuing to trim its massive stake in China's electric vehicle maker Byd.

The company sold an additional 1.3 million of Hong Kong listed shares of the company that total nearly $40 million.

That is according to a filing to the Hong Kong Stock Exchange and the sale reduced work holding to 6.9 from 7% here.

Now, it's interesting given what we've been talking about over the course of the past couple of weeks here, with regards to tariffs, we know that Eu just instituted their own tariffs on Chinese EVs Europe is one of the big customers for the Chinese market.

So I wonder to what extent this call from Berkshire was perhaps because of those potential headwinds.

Obviously, this comes after the US put their own tariffs on Chinese s. But that was much more of a kind of thesis statement about the US China relationship because we don't have Chinese S on sale here, but we do in Europe and that is going to potentially be something that's going to put pressure on a name like Byd moving forward.

And this also comes as we continued to talk about the Tesla relationship in China and whether or not full self driving cars are going to have more of a runway there versus in the States because they're getting a little bit of a leg up there with regards to regulatory approval, that could lead to a faster timeline there, which could lead to more competition in the ev space, at least the mainland.

Yeah.

And this all goes back and Buffett even talked about this uh when I was out at the Berkshire Hathaway annual conference not too long ago uh in the beginning of May and he once again was hats off to Charlie Munger.

It was really his influence as to why he saw the potential here in Byd.

And since the company, since uh Berkshire Hathaway initially bought into Byd, it has had a massive run up to the upside, especially when you compare it to those highs back into the end uh 2022.

So we take a look at the that is skyrocket nearly 600% to that record high.

Back in April of 2022 from the start of 2008.

They have certainly been able to benefit from those gains there.

The explosion uh and popularity of ev specifically demand and what that picture looks like inside of China.

So yes, going forward lots of questions about what demand is ultimately going to look like here, at least in the short term and what exactly needs to be done in order to boost demand uh beyond the Chinese market.

But again, they trimmed it, but by just a bit down to 6.9% from 7% stake here.

So not that big of an adjustment here for Berkshire.