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Charlie Munger, The Man Who Saw BYD’s Potential Passes At 99

Charlie Munger, The Man Who Saw BYD’s Potential Passes At 99

He was Warren Buffet’s longtime partner at Berkshire Hathaway, and also the man who pushed his friend to invest in BYD, which became an EV household name in China and globally.

Charlie Munger, who helped Warren Buffett build Berkshire Hathaway into an investment powerhouse, has died at a California hospital. He was 99. Berkshire Hathaway said in a statement that Munger’s family told the company that he died Tuesday morning at the hospital just over a month before his 100th birthday.

“Berkshire Hathaway could not have been built to its present status without Charlie’s inspiration, wisdom and participation,” Buffett said in a statement. Munger served as Buffett’s sounding board on investments and business decisions and helped lead Berkshire for more than five decades and served as its longtime vice chairman.

Five years ago, Warren Buffett told CNBC that he would like to take credit for the idea of investing in BYD, but it was his longtime partner and vice chairman, Charlie Munger, who pushed him to do so. Munger himself told analysts his bet for BYD was based on a single person: Wang Chuanfu.

According to Munger and BYD’s filings on the Hong Kong stock exchange, Wang was raised by his siblings, who paid for him to go to college and get an education in metallurgy. He established BYD in Shenzhen, China, to develop rechargeable batteries after briefly running a battery development unit for a state-owned metallurgy research institute in Beijing.

Within three years, BYD had become one of the world’s largest rechargeable battery suppliers. In 2003, the battery company started to make mobile phone components. Just two years later, the company launched sales of its first vehicle, a compact gasoline sedan called the F3. Two years after that, the F3 would become the top-selling model produced by a domestic Chinese carmaker.

More waves followed when traders abandoned Chinese auto stocks as an EV price wars spread across the whole industry. BYD slumped 11% in Hong Kong in March 2023, while SAIC, China’s biggest carmaker, tumbled 6.7%.

Tesla famously slashed its prices to make their vehicles more affordable. Unfortunately, it failed to outdo BYD in China as the latter has American investment titans’ support. Charlie Munger famously proclaimed having Berkshire Hathaway pump in capital to support BYD is one of his best decisions.

He was quoted at a meeting with Daily Journal Corporation, “I have never helped do anything at Berkshire that was as good as BYD. BYD is so much ahead of Tesla in China. It’s almost ridiculous.”

Munger pointed out that BYD increased the price of some of its more popular models, while Tesla had to offer discounts for its cars. Expiring consumer subsidies for electric vehicles may be pushing car companies to slash prices to retain customers.

Berkshire will likely be OK without Munger, CFRA Research analyst Cathy Seifert said, but there’s no way to replace the role he played. After all, Munger may have been one of the few people in the world willing to tell Buffett he is wrong about something. “The most pronounced impact, I think, is going to be over the next several years as we see Buffett navigate without him,” Seifert said.

Munger grew up in Omaha, Nebraska, about five blocks away from Buffett’s current home, but because Munger is seven years older the two men didn’t meet as children, even though both worked at the grocery store Buffett’s grandfather and uncle ran. When the two men met in 1959 at an Omaha dinner party, Munger was practicing law in Southern California and Buffett was running an investment partnership in Omaha.


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