BYD, a Chinese electric vehicle manufacturer, has had its stake in Berkshire Hathaway reduced to 6.9%.

Berkshire Hathaway, an early investor in China's biggest electric vehicle maker, continued to reduce its substantial stake in the company.

Berkshire Hathaway has sold 1.3 million Hong Kong-listed shares of BYD for $39.8 million, reducing its holding to 6.9% from 7%.

In 2008, the first bought 225 million shares of Shenzhen-based BYD for approximately $230 million. This investment proved to be highly profitable as the EV market experienced rapid expansion in China and other regions.

In 2022 and 2023, Berkshire sold half of its stake in BYD, which experienced a nearly 600% increase in value to a record high in April 2022, starting from the beginning of 2008.

If Berkshire's stake in a Hong Kong company falls below 6%, another filing will be required due to Hong Kong's rules that only require a filing when a stake percentage crosses a whole number.

Munger's influence

BYD, founded by Wang Chuanfu, initially focused on producing batteries for mobile phones in the 1990s. The company later shifted its focus to automobiles and is now the leading car brand in China and a significant manufacturer of EV batteries.

In the fourth quarter of 2023, BYD surpassed Tesla as the world's leading EV manufacturer, with more sales of battery-powered vehicles than its U.S. competitor.

In 2010, Buffett stated that Munger, the late vice chairman of Berkshire, "should receive 100% of the credit for BYD." Munger was introduced to BYD by his friend Li Lu, the founder of Seattle-based asset manager Himalaya Capital.