The king of value investors proved that he also knew his way around venture capital, since eighteen years later his investment in BYD had appreciated by at least 25x its initial amount.

Although, as Charlie Munger reminded us several times over the years, the Chinese manufacturer was a typical value situation - i.e., an obscure industrial company that was trading down on the value of its shareholders' equity - when Berkshire came on the scene.

It was, however, led by the "Chinese Thomas Edison", according to Munger, whose insight was well worth the phrase.

Wang Chuanfu succeeded in a gamble that at first seemed completely mad: to transform a subcontractor specialized in the manufacture of cell phones - the BYD of its origins - into an automaker capable of establishing itself as a world leader in new mobility technologies.

Between 2004 and 2014, BYD increased its sales - in US dollars - from $0.8bn to $9bn, mainly thanks to its electronics business. In 2014, the Shenzhen-based group had sold just 465,000 vehicles - still of dubious design - over the past twelve months.

Between 2014 and 2024, the growth trajectory remained similarly meteoric, with sales rising from $9bn to $106bn; while BYD sold 4.3 million vehicles over the past twelve months, almost a fifth of them outside China.

Keen observers will have noticed that BYD has indeed set out to conquer the world. While the American market has not yet been tackled, the manufacturer's models are increasingly being seen on the streets of major European cities.

BYD is off to a flying start in Europe, and it's a safe bet that the onslaught has only just begun. This, despite the 27% customs duty imposed by the European Union. In this respect, it is remarkable that the manufacturer manages to offer very attractive prices despite these.

In terms of financial performance, it's equally remarkable that BYD's meteoric expansion has been almost entirely self-financed - despite the hyper-capital-intensive nature of its business - and that the group has never made a single loss in the last twenty years.

Here, Tesla suffers from the comparison with China. The American automaker, which sold 1.8 million vehicles last year, two-thirds of them abroad, has also enjoyed a meteoric rise in sales - from $3.2bn in 2014 to $97bn in 2024 - but it has done so at the cost of six loss-making years over the period.

Moreover, its margins remain well below those of BYD. Yet Wang Chuanfu's group has up until now pursued an aggressive sales strategy aimed at undercutting prices to gain market share - the exact opposite of the strategy pursued by Tesla, which tried to establish itself with a Porsche-style positioning before coming back to reality.

When it comes to stock market valuation, it's BYD that suffers in comparison with Tesla: the former's enterprise value is currently trading at its ten-year lows of 15x expected operating profit in 2025; in contrast, despite its recent stock market turmoil, Tesla remains valued at ninety-five times expected operating profit this year.

Yet the Chinese company has undeniable advantages over its American rival: lower unit production costs, more complete vertical integration and, dare we say it, a less mercurial and, above all, less politically compromised leader.

https://www.marketscreener.com/quote/stock/BYD-COMPANY-LIMITED-5640763/news/The-BYD-wave-arrives-in-Europe-49436759/