BYD, a Chinese automaker in which Warren Buffett’s Berkshire Hathaway has a small share, has surpassed Elon Musk’s Tesla Inc. (NASDAQ:TSLA) to grab the top spot in the world for sales of electric vehicles (EVs). Between January and June, Shenzhen-based BYD sold 641,000 vehicles, a 300 percent increase over the same time the previous year, while Texas-based EV manufacturer Tesla sold 564,000 vehicles.
Musk, the wealthiest man in the world, attributed its loss of the top rank to a challenging second quarter that saw supply chain and revenue interruptions due to travel restrictions and lockdowns in China. Through economies of scale and other cost advantages, BYD, in which Buffett’s Berkshire has a 7.7% interest, has assisted in alerting many investors to China’s impending domination in the renewable energy sector.
In 2021, China, the largest auto market in the world, shipped over 500,000 EVs, an increase of more than twofold from the previous year. According to Tu Le, general director of consultancy firm Sino Auto Insights, BYD has been “hitting on all cylinders,” with products spanning several important EV market categories. In April, BYD surpassed South Korea’s LG as the world’s second-largest EV battery maker.
Buffett, who for years held new generational stocks in high regard, has now made a number of investments via his holding firm Berkshire. To name a few, he has dabbled in the EV industry, and digital banking, and even purchased Apple Inc. (NASDAQ:AAPL) shares in 2016.
Only the Vauxhall Corsa, which has been the most popular vehicle of the year so far, sold more electric cars last month than the Tesla Model Y, which had 4,194 sales. “The semiconductor scarcity is constraining the new vehicle industry considerably more than the lockdown from last year,” said Mike Hawes, chief executive of the SMMT.
“Electric vehicle demand remains the one bright light, with more electric vehicles on the road than ever before, but although this rise is good, it is not yet sufficient to overcome lower total volumes.”
For automakers and dealers, low sales and a bleak financial outlook are likely to spell doom, according to Jamie Hamilton, automotive partner and head of electric cars at Deloitte. “Economic headwinds are building as real wages are declining, consumer confidence is at an all-time low, and gas prices are at record highs. There will thus be some trepidation in the market in 2023,” he added. With an almost 50% drop to only 8,003 sales, diesel automobiles saw the biggest sales dip in June.