Jasmine Birtles
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BYD Shares Drop as Buffett Cashes Out! What Does This Mean for Investors?
Ruby Layram
22nd Sep 2025
The big news in markets this morning is that Warren Buffett’s Berkshire Hathaway has completely exited its stake in BYD, China’s electric vehicle (EV) giant. The move sent BYD shares down 3.4% in Hong Kong and 1.5% on the mainland, while the broader Hang Seng Index slipped 0.8%.
Buffett first invested in BYD nearly two decades ago at the urging of his late business partner, Charlie Munger. That bet turned into one of Berkshire’s most spectacular trades, with shares surging almost 4,000% since the initial purchase. But over the past three years, Berkshire has been steadily selling down its position, finally confirming this week that it has fully cashed out!
Also read: How to invest in electric vehicles
Why is this so important?
Buffett’s move isn’t necessarily a death knell for BYD, but it does carry symbolic weight.
Investors often look at Berkshire’s portfolio as a barometer of long-term value. An exit here suggests Berkshire sees limited upside relative to risk in BYD going forward (which could be a warning sign for investors!).
The timing also aligns with mounting pressures in China’s EV market. BYD may have overtaken Tesla in both China and Europe, but the company is now facing:
- Shrinking margins due to an aggressive price war.
- Cash strain from high production and R&D costs.
- Macro headwinds tied to China’s slower economic growth and trade tensions.
What should investors take away?
- Don’t fall in love with winners: Buffett’s discipline shows that even the best trades eventually run their course.
- BYD isn’t broken, but it is bumpy: the company still leads in EV innovation, but profitability could stay under pressure.
- China carries a risk premium: investors should factor in regulatory uncertainty, policy shifts, and intense local competition when buying Chinese equities.
What can you do right now?
- Trim EV exposure if your portfolio is heavily concentrated in Chinese names.
- Diversify into the global EV supply chain. Don’t just stick to the popular names!
- Watch where Buffett moves next. His recent allocations toward U.S. energy and Japanese trading houses give clues about where he sees better value.
- Opportunistic angle: BYD could still be interesting on sharp pullbacks if you believe in China’s long-term EV dominance. Just keep position sizes sensible.
At the end of the day, Berkshire’s sale is less about BYD failing and more about capital discipline (also known as taking profits where future growth looks less certain!). For private investors, it’s a good reminder: sometimes the best investment decision is knowing when to cash out!
What are your thoughts on BYD? Is now a good time to buy low, or are you going to follow suit and proceed with caution?
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Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here, including opinions, commentary, suggestions or strategies, are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence. When investing your capital is at risk.
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