Well-known Berkshire Hathaway fund manager Charlie Munger argues that BYD is outperforming Tesla in China, but the actual market situation looks more complicated.
Besides being incredibly well known for his investment prowess in Berkshire Hathaway along with Warren Buffet, Charlie Munger is also known for his massive investments in BYD.
Under his leadership, Berkshire Hathaway invested in BYD more than a decade ago, and since then, its property value has exploded.
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Berkshire has gained over 600% on this single investment.
In an interview with CNBC, Munger argued that the Chinese automaker dominates its American counterpart, Tesla, in China.
"Tesla twice lowered its prices in China last year. BYD hiked costs while doing so. We have a direct rivalry. In China, BYD is far ahead of Tesla "said he.
Thanks to the huge number of affordable offerings, BYD makes up most of the Chinese electric vehicle market.
However, other factors show that this competition is not much one-sided as first meets the eye.
First, despite the wide range of offerings, BYD constantly trades with Tesla cars for the title of the best-selling car of the month.
This has been observed recently in markets like Wuhan, Suzhou, and Nanjing.
China NEV Jan insured units
— Moneyball (@MoneybaII_R) February 16, 2023
✴️Chongqing
🥇BYD Song+ DM-i
✴️Tianjin
🥇BYD Song+ DM-i
✴️Chengdu
🥇Tesla Model Y
✴️Hangzhou
🥇Tesla Model 3
(DONGCHEDI) https://t.co/VewzZjVkGx pic.twitter.com/fqabmBUzf8
Perhaps the most interesting aspect of these stats is that Tesla's more luxurious cars, which are usually less popular, still keep pace with BYD's more affordable offerings, including the BYD Song + DMi.
As for the prices Munger mentioned, while Tesla will likely lower prices in order to become more competitive with brands like BYD, NIO, and Xpeng, this seems to have led to a swing in popularity toward Tesla in the fourth quarter of last year.