What exactly is Buffett's "Eye of God"?

Buffett's investment in BYD "came to a perfect end."

This 17-year bond, a classic case in the world's investment history, achieved a win-win situation for multiple parties: Buffett probably got about 38 times the investment return, and BYD also received strong support from capital - the value and significance of which are not limited to those US dollars.

For BYD, which has long grown into a giant enterprise, saying goodbye to Buffett at this time does not damage its industry status, and it naturally behaves calmly and gracefully. As the official spokesperson responded, "Stock investment involves both buying and selling, which is a very normal thing."

So, were there any abnormal things in this more than a decade-long bond? Obviously, there were. Buffett, known for being reluctant to invest in immature new industries, Chinese enterprises, and "four - wheeled" businesses, completely broke all his investment preferences and unwritten rules and chose to invest in BYD, and only BYD. He even looked down on Tesla, which was only valued at $200 million at that time.

Obviously, there must be some parts in that legendary investment story that are unknown to the public.

Historical Nodes

2008 was a special year. The collapse of Lehman Brothers triggered a global financial tsunami, and the market fell into extreme panic. Buffett completed several landmark investments in the few years around that time.

The investment case of BYD was one of them. In every aspect, this was an extremely special investment. Buffett has always publicly expressed his cautious attitude towards technology stocks and automobile stocks. He has repeatedly emphasized that "the returns of technology stocks fluctuate too much" and "businesses with four wheels are not good."

As a Chinese automobile manufacturer with limited scale at that time, BYD was not only involved in the traditional automobile business but also an early explorer of new energy technologies. Obviously, this completely did not conform to the type of enterprises that Buffett always favored, which were "simple and easy to understand, with lasting competitive advantages."

What's even more confusing is that in 2008, BYD was still in the early stage of the new energy vehicle field. It had just launched its first mass - produced F3DM dual - mode electric vehicle, and Tesla had just released its first all - electric sports car, the Roadster, not long ago. The entire industry was still in its infancy, with an unclear prospect and no mention of profitability or moats.

Unless some people already knew that the prospect of the new energy industry would be greater than all the public's imagination.

In 2008, a series of major events were quietly changing the world's energy pattern. In China, Beijing successfully hosted the Summer Olympics and vigorously promoted the concept of "Green Olympics." The government demonstrated its commitment to developing clean energy and environmental protection technologies during this period.

To reduce emissions, the exhaust emissions of fuel - powered vehicles were naturally the key control target. From the end of 2007 to 2008, China successively introduced the "Administrative Rules for the Access to New Energy Vehicle Production" and the "Catalogue for the Guidance of Industrial Structure Adjustment (2007 Edition)," clearly listing new energy vehicles as an encouraged industry.

In 2009, shortly after Berkshire invested in BYD, the Chinese Ministry of Finance issued a notice on subsidies for new energy vehicles, which greatly stimulated and even directly promoted the rapid development of the Chinese new energy vehicle market.

In fact, not only in China but also globally, countries have accelerated the layout of new energy vehicles.

In April 2008, the United States issued new regulations requiring automobile manufacturers to significantly improve fuel efficiency standards. In June, it announced a $30 million grant to support the research and development of plug - in hybrid vehicles.

Major EU countries, including Germany, France, and the UK, also introduced a large number of new energy support policies between 2008 and 2009, including R & D funding investment, tax incentives, and charging infrastructure construction. Japan continued to promote its long - term new energy strategy formulated in the last century, but it chose hydrogen energy.

It can be seen that Buffett's investment, which deviated from the traditional model, happened to coincide with the key nodes of the global energy revolution and policy turning point. It is almost impossible to say that this was entirely due to the foresight of one or two individuals.

If Buffett had also invested in other leading new energy vehicle enterprises, it would have been a precise policy prediction. But Buffett only invested in BYD in China. Later events also proved that the determination of other countries, including the United States, to develop new energy vehicles was far less firm than that of China.

Legendary Figures

Buffett and Munger's successful investment in BYD is indeed a good story, but the reasons behind their missed opportunity with Tesla are more worthy of exploration.

Tesla is undoubtedly the initiator and pioneer of the global new energy vehicle market. The relationship between the introduction of Tesla's Gigafactory in Shanghai and the explosive growth of the Chinese new energy vehicle industry is inseparable.

Elon Musk also seemed a bit resentful about Buffett not investing in Tesla. In 2023, Musk publicly stated on social media that in 2008, Tesla was only valued at $200 million, but Buffett's partner, Munger, declined this historic investment opportunity.

If they had really invested in Tesla, the performance of Buffett's managed investment portfolio, which soared from $15 billion in 1994 to $300 billion in 2023, could have been achieved by just spending $20 million to buy 10% of Tesla's equity at that time.

Buffett and Munger have never hidden their disapproval of Musk. On the one hand, they praise Musk as a "creative person" and "one of the boldest geniuses in history." On the other hand, they question that Musk overestimates himself too much. "Musk may think he has an IQ of 250 when it's actually 190."

Musk's investment and business concepts are indeed different from those of Buffett and Munger. Over - confident Musk always sets high - risk goals such as rocket recycling and Mars colonization for his enterprises, which completely does not conform to Buffett's risk preference of "only fighting battles with certainty," and this ultimately led to the constant conflict between the two sides.

The deeper reason may be hidden in the power structure of the US capital market. Musk represents the challenge of the new American tech elites to the traditional old - money system. The attitude of the US energy, military, and financial consortia towards Musk is both utilization and exclusion. They exert influence through capital investment but are reluctant to cede core interests to him.

Although the Democratic government supports the development of the new energy industry, the government subsidies it provides only favor the interests of established automobile enterprises such as Ford. So, Musk, who originally supported the Democratic Party, turned to support Trump's election campaign. But the old energy is also one of the basic sectors of the "old money" in the United States. Therefore, Chinese netizens knew that Musk would be betrayed, which also seems to verify Munger's evaluation of Musk many years ago.

In contrast, Wang Chuanfu is much more pragmatic: He prefers to talk about topics such as battery technology, the new energy vehicle industry chain, and engineer culture, and hardly ever publicly expresses personal opinions on sensitive domestic and international political issues - this is exactly the image of a Chinese person who is safe, controllable, and trustworthy in the eyes of Western capital.

Perhaps for this reason, Munger and Buffett spare no effort to endorse Wang Chuanfu. They have publicly praised Wang Chuanfu as "a combination of Edison and Welch," capable of solving technical problems with the acumen of an engineer and controlling the operation of the enterprise with the iron fist of a manager.

When Buffett finally chose to liquidate his shares in BYD and end this long - term investment experience, all the mysteries finally became history. Although it really happened, it is almost fading away.

Great Changes in the Landscape

The changes in the era's landscape are always hidden in the appearance and departure of some legendary figures.

In 2023, Munger, the protagonist of this investment, passed away. In 2024, Buffett clearly stated again that his future investment focus would shift to the US domestic market, and he increased his holdings in traditional energy and high - dividend assets such as Occidental Petroleum and Japanese trading companies. In 2025, Trump, who was re - elected, launched a tariff war globally.

By this time, from both geopolitical and industry layout perspectives, BYD had become a complete outlier in Buffett's investment portfolio, and its eye - catching degree was increasing day by day.

As a Chinese enterprise, BYD has changed the pattern of the Chinese automobile industry. The change in the Chinese automobile industry has changed the world's economic pattern, and the change in the world's economic pattern will directly lead to a drastic change in the world's political pattern. Its significance is far greater than business operations or an investment transaction itself.

BYD, with disruptive technologies such as blade batteries and DM - i hybrid systems, has built a full - industrial - chain barrier covering batteries, motors, and electronic controls. It also marks the transformation of the Chinese automobile industry from the passive acceptance of "trading the market for technology" to the active attack of "creating the market with technology."

The transformative power of the Chinese automobile industry has radiated globally. In 2023, China's automobile exports reached 5.221 million vehicles, a year - on - year increase of 57.4%, making China surpass Japan for the first time to become the world's largest automobile exporter. Among them, the exports of new energy vehicles reached 1.203 million vehicles, a year - on - year increase of 77.6%.

Electric passenger vehicles, lithium - ion batteries, and solar cells have become the "new three" export products of China, with their export values all exceeding the trillion - yuan mark. As a pioneer of Chinese automobiles going global, BYD's production has far exceeded that of Tesla. In September last year, it achieved the production of its 9 millionth new energy vehicle, becoming the world's first automobile enterprise to reach this milestone.

It can be said that the rise of Chinese new energy vehicle brands represented by BYD has posed a strong challenge to Tesla in the global market and changed the situation where Tesla was once almost "dominant."

Let Wang Chuanfu, who has no political ambitions, check and balance Musk, weaken the foundation of his challenge to the traditional US interest system, and then use laws to exclude Chinese products from the US market - the old - money in the United States really has a good plan.

The returns Buffett obtained from his investment in BYD are probably not limited to the financial returns on the books.

The rise of BYD has brought about profound changes in the industrial ecosystem, extended the payment cycles of the Chinese automobile supply chain, transferred a considerable amount of financial risks to small and medium - sized suppliers, and squeezed the living space of major joint - venture automobile enterprises.

These enterprises originally contributed a large amount of tax revenue and employment to local finances, while the profits of BYD mainly belong to shareholders such as Wang Chuanfu and Buffett. Behind this structural change is the vivid manifestation of the invisible power of capital.

Regardless of how many waves of industrial representatives have come and gone in the world, capital is always the final winner. Buffett left with a 38 - fold return, leaving behind a completely changed Chinese automobile industry.

Conclusion

Since 1992, when Qian Xuesen suggested to the central government to develop new energy vehicles, China has had a strategic determination and continuous investment that other countries can hardly imagine in order to achieve security, control, and overtake on a curve.

Qian Xuesen suggested developing new energy vehicles

This political and economic system, which is willing to invest for decades for long - term interests and goals and is willing to promote its growth with tens of billions or even hundreds of billions of investment, and implement it firmly with the whole country working together, is unique in the world.

Coupled with the huge market composed of hundreds of millions of middle - class people, the numerous science and engineering talents cultivated through popular education, and the open - door policy since the 1970s, it has finally nurtured a giant with a trillion - yuan market value in the new energy era.

Compared with the more than a decade of investment and accompaniment by European and American capital, this is a more real and reliable long - termism.

This article is from the WeChat public account "Juchao WAVE." Author: Xiaoluyu, Editor: Yang Xuran. Republished by 36Kr with permission.