BYD, which is backed by Warren Buffett, has lost $18 billion in value in the last month as rival EV maker Tesla pursues a price war. The Chinese automaker’s US-listed shares have fallen 14% since February 1, trading at just under $58 as of Friday’s close. In comparison, BlackRock’s iShares Self-Driving EV & Tech ETF, which tracks publicly traded companies in the sector, has dropped 5% during the same time period.
BYD’s fall has reduced its total US market capitalization to $104 billion in just over a month.
Meanwhile, Tesla’s stock has risen 9% since February 1, adding to a rally fueled by investors’ growing confidence that interest-rate cuts are on the way, as well as a strong fourth-quarter earnings report that exceeded Wall Street forecasts.
Wedbush analyst Dan Ives described the Elon Musk-led carmaker’s price cuts in China as a huge success in order to revive faltering demand and boost revenues in the key EV market. However, Tesla has since reversed the price cuts on its flagship Model Y and Model 3 vehicles.
Tesla reduced the prices of its two most expensive models in the United States over the weekend. This is the fifth time the carmaker has reduced the price of its vehicles in 2023, indicating that it is committed to continuing its price war.
BYD shares in Hong Kong and Shenzen, China, have fallen around 13% since February 1, mirroring losses in the US. Berkshire Hathaway spent $232 million in 2008 to purchase 225 million shares of BYD at a price of around $1 per share. Even after the recent losses, BYD’s stock price has increased nearly 60-fold since then, implying that Berkshire has made roughly $13 billion, or a 5,500% gain, on its initial investment.
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