BYD Stock Falls. Warren Buffett’s Berkshire Hathaway Is Bailing on the EV Maker.

People look at a Seagull EV from BYD. Coming into Monday trading, BYD stock was up about 28% year to date. (Photo by LILLIAN SUWANRUMPHA/AFP via Getty Images)

Key Points

About This Summary

• Berkshire Hathaway sold its entire stake in Chinese electric vehicle maker BYD, CNBC reports.
• BYD stock fell after the announcement; Berkshire has been scaling back its holdings in the company since 2022.
• The Chinese car business has become competitive, with EV makers cutting prices; BYD’s profit margins have declined.

Warren Buffett’s Berkshire Hathaway sold its stake in Chinese electric vehicle maker BYD . Investors don’t like that.

BYD stock fell 3.4% in overseas trading to HK$109.70, while the S&P 500 and Dow Jones Industrial Average gained 0.4% and 0.1%, respectively.

The move came after CNBC reported that Berkshire exited its entire position in the car company. To be sure, the timing of the move seems odd. Berkshire’s first-quarter report lists Berkshire’s BYD stake at $0 as of March 31, down from $415 million at the end of 2024. But, CNBC said a Berkshire official confirmed the stock sale.

That Berkshire was scaling back its holdings is nothing new. Buffett’s company has been unloading stock since 2022. Still, losing a longtime holder, and one as important as Berkshire, is unnerving for investors. It bought 225 million shares of BYD stock through a subsidiary in 2008, representing roughly 20% of the stock listed in Hong Kong.

BYD stock rose roughly 30-fold over Berkshire’s holding period.

What led to Berkshire’s selling is anyone’s guess. The Chinese car business has become incredibly competitive with EV makers slashing prices to maintain market share. BYD has grown annual sales volumes by an incredible 75% over the past two years. Operating profit margins, however, have declined slightly over that span, according to FactSet.

Whatever the reason, investors will have to get used to not having the implicit backing of Berkshire when evaluating BYD stock.

Coming into Monday trading, BYD shares were up about 28% year to date.

Write to Al Root at allen.root@dowjones.com