Warren Buffett’s Berkshire Hathaway recently acquired a 10% stake in BYD, an automotive company, but it’s unlikely that the company will invest in Tesla despite Elon Musk’s suggestion. Previous comments made by Buffett and the late Charlie Munger have expressed their skepticism about investing in the automotive industry.
At Berkshire Hathaway’s 2023 annual shareholder meeting, Buffett and Munger shared their concerns about the highly competitive and uncertain future of car companies. They believe that the industry is not a good investment opportunity due to its worldwide competitors that are unlikely to disappear. The high capital costs and risks associated with electric vehicles have also deterred Berkshire Hathaway from considering investments in the automotive sector.
Musk’s suggestion that Berkshire Hathaway should invest in Tesla is not new, but previous statements suggest that it is unlikely to happen. Despite Musk’s belief that it is an obvious move for Buffett to take a position in Tesla, Buffett’s hesitation to invest in the automotive industry remains unchanged.
