> Warren Buffett Blog: BYD auto stock prices rise on interest from Samsung

Monday, July 18, 2016

BYD auto stock prices rise on interest from Samsung

Shares of BYD, the Chinese battery supplier and automobile manufacturer backed by Warren Buffett’s Berkshire Hathaway, rose by 5% to their best close in Hong Kong since June 2015 on hopes that talks on cooperation with Samsung will bear fruit.

BYD confirmed in a statement that Samsung was considering the purchase of a stake via a planned domestic “A-share” secondary offering. The South Korean electronics giant’s interest “is primarily based on its confidence in the Company’s development prospects in the long term and future strategic cooperation with the Company in relation to electric vehicle components,” BYD said.  “Going forward, the parties will jointly seize opportunities in the rapid development of the global electric vehicles industry and promote sustainable development of the parties’ electric vehicles related businesses.”

A switch to battery-powered vehicles from fossil fuels, the spread of self-driving cars, and expanding Internet connectivity is expected to reshape the auto industry in the coming decade, many auto industry executives in China believe.

BYD’s chairman Wang Chuan-fu has helped BYD to make a mark as a producer of electric and hybrid electric vehicles. It set up an electric bus manufacturing plant in southern California in 2014 and has a contract to supply electric buses to Los Angeles County. In the past 2 years, its electric buses or cars have gone into service from Montevideo to Jakarta.

Wang, who was China’s richest man with a fortune of $5.8 billion in 2009, was worth $5.5 billion on the Forbes Real-Time Billionaire’s List today. In 2008 Warren Buffett’s Berkshire Hathaway bought a 10% stake in BYD.