REUTERS/Jo Yong-Hak
Warren Buffett is a surprise winner in the electric-vehicle revolution.
Berkshire Hathaway owns stakes in General Motors and Chinese automaker BYD.
Buffett’s company has scored a $6 billion gain on the two stocks in less than five months.
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Warren Buffett’s Berkshire Hathaway is often associated with insurance, railroads, and other humdrum industries. However, the famed investor’s conglomerate is quietly cashing in on one of the hottest sectors around: electric vehicles.
Buffett’s company has notched a $6 billion gain on its General Motors and BYD bets in the past five months alone, as shares in the US and Chinese automakers have surged to record highs.
The investor enthusiasm reflects GM’s plans to roll out 30 new electric vehicles worldwide by 2025, and BYD’s rapid growth and status as the world’s largest electric-vehicle manufacturer.
Berkshire first invested in GM in 2012, then gradually grew its position to 80 million shares worth $2.4 billion as of September 30 last year.
The automaker’s shares have soared more than 125% since then, boosting the value of Berkshire’s stake to $4.3 billion as of Thursday’s close, assuming the size of its holding hasn’t changed.
Buffett and his team bet on BYD even earlier, snapping up 225 million shares at a cost of around $1 per share in 2008. BYD’s Hong Kong-listed shares now change hands at the equivalent of $34 each, valuing Berkshire’s position at $7.8 billion today.
The Chinese carmaker’s stock price was under $16 at the end of September, meaning Berkshire’s stake has jumped in value by $4.2 billion, or almost 120% since then.
Combine the $1.9 billion gain on GM with the $4.2 billion gain on BYD, and Berkshire has racked up about $6.1 billion in unrealized gains on those two stakes in under five months.
Buffett has been criticized for not investing in high-flying technology stocks such as Amazon and Alphabet over the past decade. Between Berkshire’s massive Apple stake and its exposure to the electric-vehicle revolution via GM and BYD, the investor won’t be too worried.
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