Elon Musk paid respects to a Tesla rival yesterday. But it was in response to a 2011 video of him laughing at its vehicle quality.
The Tesla CEO responded Friday to a Bloomberg interview in which he derided China’s BYD. As the interviewer mentions the Chinese company as a competitor and notes Berkshire Hathaway’s 10% stake, Musk can’t stop laughing. When asked why he’s chortling, he responds, “Have you seen their car?” He then admits he doesn’t see BYD as a competitor.
He’s no longer laughing.
What do you think of BYD?
Elon Musk starts laughing… have you seen their cars ?
— Tesla Owners Silicon Valley (@teslaownersSV) May 27, 2023
In April, BYD reported that its profits had surged over 400% in the first quarter from a year earlier, and that its vehicle sales had nearly doubled to 550,000 globally in the quarter. The EV maker has ousted Volkswagen as the best-selling brand among automakers in China—a key market for Tesla—and it’s pushing into Europe, Latin America, and Asian markets. It’s also dominating Tesla in China.
“That was many years ago,” Musk said of the video clip, posted by Tesla Owners Silicon Valley. “Their cars are highly competitive these days.
“BYD is very, very strong,” Volkswagen CEO Oliver Blume said in Shanghai last month.
And this week, Ford CEO Jim Farley mentioned BYD while explaining that Ford’s main EV rivals are Chinese companies, not GM or Toyota. “The Chinese are going to be the powerhouse,” he said at the Morgan Stanley Sustainable Finance Summit.
“BYD is so much ahead of Tesla in China, it’s almost ridiculous,” Berkshire Hathaway vice chairman Charlie Munger said earlier this year. Warren Buffett’s right-hand man added, “I have never helped do anything at Berkshire that was as good as BYD.” Munger was behind the conglomerate’s decision to invest in the fledgling Chinese carmaker in 2008.
That same year, Musk had lunch with Munger, saying Berkshire Hathaway should invest in Tesla. Munger declined, and indeed Berkshire has largely steered clear of automakers over the decades.
“Charlie and I for long have felt that the auto industry is just too tough,” Buffett explained earlier this month at Berkshire Hathaway’s annual conference. But they placed a bet on BYD.
In the first quarter, BYD had nearly 40% of the market among new energy vehicle makers in China, according to Bloomberg, compared to just over 10% for Telsa, a distant second. Tesla earlier this year initiated a price war against BYD in China.
Musk was laughing about BYD three years after Munger’s investment.
“I don’t think they have a great product,” Musk continues in a longer version of the 2011 Bloomberg interview posted on YouTube. “I don’t think it’s particularly attractive. The technology is not very strong. And BYD as a company has pretty severe problems in their home turf in China. So I think their focus is, and rightly should be, on making sure they don’t die in China.”
It’s safe to say that BYD did not die.