BYD Overtakes Volkswagen as China’s Top Carmaker: Warren Buffett’s Electric Revolution. Volkswagen has just been dethroned as China’s top carmaker by BYD, a company backed by Warren Buffett. After a 15-year reign at the top of China’s car market, Volkswagen is now being overtaken by BYD, which is based in Shenzhen and specializes in electric vehicles (EVs). In December, BYD led domestic sales for the 12th consecutive month, surpassing Volkswagen in yearly sales.
This shift can be attributed to the generous government subsidies that have aided BYD in selling nearly 30% more new cars compared to the previous year, giving them a 12% share of the national market. Warren Buffett’s Berkshire Hathaway initially invested in BYD in 2008, purchasing a 10% share for $230 million. While Buffett has gradually reduced his position, this investment has been highly profitable, yielding him approximately $2.5 billion.
Volkswagen, an early adopter of EV technology, has faced challenges in China, where its sales growth has lagged behind the industry. Factors such as a recession in Germany and persistent inflation have increased Volkswagen’s production costs, making it harder to compete with Chinese manufacturers that benefit from subsidies.
BYD Overtakes Volkswagen as China’s Top Carmaker: Warren Buffett’s Electric Revolution
China holds a dominant position in the global EV industry, with 59% of all new EVs sold in China in 2022 and 64% of the world’s EVs produced there. Chinese manufacturers like BYD have been leading the way both domestically and internationally. BYD recently overtook Tesla as the world’s largest EV seller.
Despite facing a 27.5% tariff on Chinese-made EVs in the United States, BYD gained attention with its affordable pricing, offering an EV starting at just $11,000 in China. Some experts believe that even with the tariff, BYD vehicles could soon become competitive in the American market.
However, Chinese automakers, including BYD, are encountering resistance from the European Union, which has launched an investigation to assess whether subsidies provide them with an unfair advantage in the export market.
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