Warren Buffett made the right call on EV batteries By The Electric Viking

Hello, my friends, welcome to the electric viking fantastic to see you here now wasn't long ago that I started to think that Warren Buffett had maybe started to lose his marbles a little and had certainly started to lose his edge. Now. Obviously, Berkshire Hathaway took a huge hit on its airline position and a number of other positions it was holding about a year to 18 months ago, and really many in the media were wondering just what on earth he'd been thinking what he was doing and why it was that Buffett really hadn't pledged his support in any way to tesla. In fact, he criticized them on a couple of occasions. Not many, though realized at the time that more than 10 years ago, Buffett made a huge call on investing in basically and completely unknown eV player. At the time they made electric vehicle batteries, not really ones that were all that good at the time to be honest, and they made cars which were frankly, they were yes, they were, but somehow Buffett and the man who advised him to buy into BYD got it right now, who was that man? Well, I'll, let you look him up.

He owns Himalaya capital LLC, one of the most successful hedge funds in the history of American hedge funds, so the sage of Avalara's, Berkshire, Hathaway bet on china's BYD, now looks like it's paying off very handsomely, and it's all about the technology and the mindset. Now Buffett gets lots of investments right with his patient and deliberate, buy and hold strategy, and you should employ a similar strategy in all your investments. Don't ever buy something to sell it in two months or a week or a day or a year. You want to find a company you can bet on holding for a minimum of 10 years that my friends is where you will get true value, but it's becoming apparent with Buffett that he is actually doing it again with electric vehicles for investors pouring money into the technology. It would be wise to consider how the sage of Omaha has looked into the future of the sector.

The value of Berkshire Hathaway inc holdings in BYD co-limited, one of china's oldest makers of cars and automotive batteries, has skyrocketed this year. BYD's share price is up.30 percent Buffett has backed BYD for over a decade holding around 22 in the Hong Kong listed company, which now sits on a market cap of over 117 billion dollars. That's more than investor darling, Neo inc, the new generation Chinese automaker listed in New York, and, to be frank, it should be more than Neo. In fact, it should be a lot more BYD's PE is currently around 120 compared to tesla's 680. Byd's videos that I'll put in the description where you can learn more about the company and in fact you can learn that I actually advise people to buy this stock before it increased by 30 this year, and I believe quite a number of viewers of the channel did so and for kudos to them.

This is not about me. This is about you, pulling the trigger doing your own research and then making money out of that situation. I think some viewers of this channel have made some very smart investment decisions. So how is BYD different from the rest of the universe, and why does it keep on surging? Well, BYD is more than just another upstart trying to take on tesla inc, in fact they're partnering with them to potentially build the model too, but that news is also in my other videos. You can check that out in the links below as well.

Now it's getting closer to mastering the right technology for eV batteries, the core of the electric car that accounts for almost 50 percent of the price and is crucial to widespread eV adoption and that's what Berkshire has honed in on now. Currently, BYD is the world's fourth-largest battery manufacturer. It focuses now specifically on batteries for mobile phones, but much more so on batteries for electric cars, long-time Buffett partner, charlie hunger, had spotted the genius of Wang Chan FM, the chemist and researcher behind BYD, leading to Berkshire, taking a 10 stake for around 230 million dollars in the company in 2008. In a 2009 fortune magazine cover story, hunger described wan gas a combination of Thomas Edison and General Electric's jack Welch, something like Edison in solving technical problems and something like Welch in getting done what he needs to do. I have never seen anything like it.

In my personal opinion, Wang Chen FM and Elon Musk are very, very similar people. Now that has turned out to be quite oppression. Call Wang understands batteries. Getting the chemistry right would determine how well cars equipped with these powertrains would and could do its given his company a leg up as the rest of the sector stumbles through recalls and battery fires. BYD, electric cars are kind of clunky and don't carry the techie coolness of new generation cars like Neo, inc or tesla's model x with its falcon wing doors, but it does have the right price and safe battery technology with the blade battery.

It's now, china's largest eV maker selling, more cars than the competition in the mainland and, in fact, more cars than Neo young and lee auto combined now, BYD has doubled down on making affordable batteries at scale and is bet on the technology to achieve that goal. At his 2020 annual results, the company said it would stop plans for nickel cobalt, manganese battery adoption, which most car and battery makers are set on. Instead, BYD has turned all of its attention to so-called lithium-ion, phosphate or LFP batteries, for its so-called blade battery, which was released early last year. Wang's focus on laps is turning out to be a game changer and a very, very astute and wise decision. It's cheaper, and it's much more readily usable as well.

The chemistry is far more stable than up-and-coming than the standard MCM type batteries, and it promises to take cars hundreds of kilometers further but isn't as safe, so NCM batteries standard lithium-ion batteries will give you higher energy density and will definitely give you a longer range. However, they cost a lot more to build and nowhere near as safe. Now, if this doesn't mean anything, do you think yeah yeah whatever who cares? Well, I can tell you now: Hyundai right now, probably wouldn't agree with you considering they just had to recall thousands of cars at a cost of one billion dollars after the batteries they used supplied by LG Chem started having fires now another advantage of the blade battery. Is it takes up less space and reduces the weight of the car? Another problem that automakers have had to contend with BYD has managed to bring down costs by almost 30 percent and reduce the number of parts while boosting efficiency. Now BYD is actually vertically integrated in a very similar way to tesla, and they've reduced the cost of their batteries to being below 100 us dollars per kilowatt-hour.96 us dollars per kilowatt-hour to be precise, BYD's current sales, more than 70 percent of BYD's current sales are battery electric vehicles, and that number is increasing. Every single week now, BYD commands almost 15 of the battery market in China, behind contemporary ampere technology, limited call, which is the largest battery company in the world.

Globally, it could end up with a 3 share in the electric vehicle market by 2025. According to an estimate by analysts at Goldman Sachs group, inc BYD's battery deliveries for its own cars and external sales could reach 30 of industry consumption Goldman notes. carmakers too are realizing. This is the way forward, or at least until other options can be commercially produced, that don't result in frequent battery fires and are cheaper. Tesla is testing BYD's, blade battery for its model y and its model 2.

According to reports in Chinese media, the likes of Volkswagen AG, for their part, want to make their own powertrains even for one of the world's largest carmakers. That is a very challenging task. Unlikely to yield results anytime soon now remember. BYD has also signed a joint venture with Toyota, so Toyota's next eV won't actually really be a Toyota. It will be a BYD with Toyota badges stuck on it, and maybe some interior garnishing to make it look a bit more toyota-ish.

That's how far BYD has come. Berkshire's, recognition of Wang's expertise and the value of battery chemistry, much more than the rest of the car itself, has turned out to be a win for now. If Wang and his company can stay ahead of the competition with evolving eV tech, BYD could be a model for investors to keep an eye on that more than the fascinating, but distant plans of some carmakers is the kind of realism that caught Buffett's eye. So I was wrong. Buffett wasn't losing the plot he just bet on another horse and out of the horse, I believe could be a winner in the end this year, BYD's stock price is up over 30 and Buffett.

It turns out hadn't lost his mojo. After all, thanks for watching I'll see you on the next one, bye-bye.

Source : The Electric Viking