July 7, 2022 · less than 3 min read
Warren Buffett has done it again.
Ascending to the throne
For all the huffing and puffing over EVs and green vehicles in the global North, it’s easy to forget that the biggest EV market in the world is actually China. So, it’s no surprise that sooner or later, China was going to develop a world-leading EV production firm.
And, unfortunately for Tesla, that’s exactly what’s happened. Warren Buffett-backed BYD has just overtaken Tesla to become the biggest EV seller in the world.
I’m all the way up
How long this will remain the case isn’t certain, because it would be unfair to Tesla to gloss over some of the bad luck it’s had to contend with recently. It’s been particularly hard hit by Covid lockdowns in China and had to temporarily close its Shanghai factory due to that pesky pandemic.
It’s been smooth sailing for BYD on the other hand, where shares have risen 36% since January alone. It will likely take a couple of years for one or the other to become the undisputed leader, but this is certainly unwelcome news for Elon Musk.
So, what exactly has caught Buffett’s eye? First of all, BYD’s operations have always been geared towards electric transport as a whole, including buses. And sure, Tesla has now announced an electric bus, but with BYD already well exposed in this area, it streaks ahead on that front.
Most impressively though, pretty much all of BYD’s production is in-house. The firm produces its own chips and batteries internally, meaning that it’s been hugely successful at avoiding the supply chain disruption plaguing Tesla. And this is a key point when it comes to EVs. Sure, the vehicles themselves are hugely impressive, but some of the best opportunities are actually in the components and supplies needed to produce them. So, how can you use this news? Pay close attention to batteries, chips, semiconductors and the like if you want to find some really exciting opportunities and investments.
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