Why Did Berkshire Hathaway Sell All Its BYD Shares Now?

Berkshire Hathaway’s decision to sell its entire stake in BYD has captured global headlines and investor attention. The move brings an end to a landmark investment that generated returns of nearly 4000 percent over 17 years and raises immediate questions about market timing and long-term strategy.

The exit followed a period of gradual share sales, culminating in September 2025, when Berkshire confirmed through filings and public statements that its BYD stake was valued at zero.

News of the exit sent ripples through the electric vehicle industry, coming amid high volatility and shifting dynamics in the Chinese automotive market.

What Sparked Berkshire Hathaway’s Exit from BYD?

The motivation behind Berkshire Hathaway’s exit was multifaceted. After amassing astronomical gains since purchasing 225 million shares in 2008, the opportunity to realize profits became increasingly compelling for Buffett and his team.

In public filings, Berkshire reported the BYD holding had dropped in value from $415 million at the end of 2024 to zero by March 2025, reflecting the sell-off’s completion.

Financial prudence and portfolio rebalancing likely played a central role in the timing. Meanwhile, broader shifts in China’s electric vehicle sector contributed to the exit scenario.

Increased competition, smaller profits, and slower growth at home added more pressure, leading many analysts to see Berkshire’s action as a strategic shift and a sign of changing confidence in the industry.

Did you know?
BYD started as a rechargeable battery maker before becoming a global electric vehicle leader.

How Did Charlie Munger Shape the BYD Bet?

Charlie Munger, Berkshire’s late vice chairman, was the key architect of the BYD investment. In 2008, he endorsed the purchase when BYD was an obscure Chinese battery maker led by Wang Chuanfu.

At the time, Munger called BYD "a damn miracle" and commended Wang’s vision for transforming the company into a force in rechargeable batteries and EV manufacturing.

Munger’s conviction gave Buffett the confidence to back a nontraditional play outside the U.S. market.

At the 2009 Berkshire Hathaway annual meeting, Munger explained to shareholders how BYD’s track record and rapid innovation justified the risk, establishing the foundation for the extraordinary returns that followed.

What Challenges Is BYD Facing in China’s EV Market?

Recent quarters have tested BYD's fortunes as China's electric vehicle sector entered a fierce price war. Competitive pressure led to shrinking profits, with the company posting its first quarterly earnings decline in over three years.

Net profit fell 30 percent year-on-year in the second quarter of 2025, underscoring how price cuts and market share battles were taking a toll.

In response, BYD revised its annual sales target downward by 16 percent, aiming for 4.6 million vehicles rather than the previously announced 5.5 million units.

Domestic demand softened, with sales slipping for four straight months through August 2025, despite the company’s efforts to sustain growth and innovation.

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How Has BYD’s Stock and Global Strategy Responded?

The announcement of Berkshire’s full exit immediately impacted BYD’s stock price. Shares dropped 3.4 percent in Hong Kong and 1.5 percent in Shenzhen after news broke, signifying investor apprehension over the future path for both BYD and the broader EV sector in China.

Despite this, BYD expanded abroad, with European sales surging 225 percent in recent periods as Tesla’s regional sales declined.

The company now commands 17.8 percent of the global battery market, leveraging its experience as a battery innovator to shore up leadership beyond automotive products.

BYD’s management, including general manager Li Yunfei, publicly thanked Berkshire for its support and described the exit as a normal investing process, stressing continued confidence in the firm’s global vision.

What Does Berkshire’s Move Signal for Investors?

Buffett’s move to close the BYD chapter points to a mixture of risk assessment, profit-taking, and skepticism about short-term dynamics in the Chinese EV market.

Analysts see the sale as a classic Buffett approach: exit when value creation has peaked, redeploy capital, and avoid prolonged exposure to sectors facing margin stress or regulatory uncertainty.

The outcome could influence other institutional investors watching for signs of deeper instability or opportunities in China’s automotive transformation.

As Berkshire reallocates capital, the example may prompt fresh debate on how to evaluate emerging market stakes and high-growth, high-volatility sectors.

Investors and industry observers are likely to closely monitor BYD's performance for insights into the sector's upcoming phase.

Looking ahead, Berkshire Hathaway’s strategic exit from BYD is likely to spark continued scrutiny of China’s electric vehicle sector and provoke broader questions about long-term investing in fast-evolving global industries.

The move signals a willingness to evolve, adapt, and capitalize on new opportunities as markets shift, a hallmark of Berkshire’s legacy.