Warren Buffett's Berkshire Hathaway Sells 1.3 Million BYD Shares Amid New EU Tariffs

Warren Buffett’s Berkshire Hathaway sold 1.3 million BYD shares, decreasing its stake amid new EU tariffs on Chinese electric vehicle imports. Despite the tariffs, BYD's European profits remain strong.

Berkshire Hathaway Reduces BYD Stake as EU Imposes New Tariffs on Chinese Electric Vehicles

According to a stock exchange filing (via Teslarati), Berkshire sold shares of BYD on June 11, 2024. After the sale, Berkshire's ownership of BYD's issued H-shares decreased from 7.02% to 6.90%.

The European Commission recently implemented new tariffs on Chinese electric vehicle (EV) imports, which will impact Chinese manufacturers. Tariffs of up to 38% were imposed on certain Chinese manufacturers. BYD was granted an individual tariff of 17.4% due to its participation in the European Commission's inquiry into importing electric vehicles manufactured in China.

Nevertheless, despite implementing the new tariffs, BYD is anticipated to generate substantial profits in the European Union from its electric vehicle offerings.

BYD Unfazed by EU Tariffs, Maintains Strong Profit Margins on Electric Vehicle Sales in Europe

BYD appears unconcerned by the European Union's recent tariffs on Chinese electric vehicle (EV) imports. According to analysts, the profits of the Chinese automaker from the sale of electric vehicles (EVs) in Europe continue to exceed those of local EU automakers.

The European Commission implemented new tariffs on Chinese electric vehicle imports based on its ongoing anti-subsidy investigation. The Commission imposed up to 38% tariffs on specific electric vehicles (EVs) manufactured in China and imported into Europe. On top of the existing 10% tariffs, the new Chinese EV import duties will be enforced.

Three Chinese manufacturers were granted individual duty rates due to cooperating with the European Commission's investigation. BYD received the least number of additional tariffs, at 17.4%. BYD's tariffs will total nearly 30%.

The company's EU profits will not be impacted by the nearly 30% duty on BYD, as per Rhodium Group. The Group compared the earnings of BYD with the BYD Seal U in Europe and China to illustrate its point. For each BYD Seal U sold in Europe, the Chinese automaker generates a profit of $15,400. In contrast, BYD generates $1,400 from each Seal U unit sold in China. The EU premium, which Chinese EV manufacturers refer to, is the substantial profit BYD generates on each Seal U vehicle.

“Our analysis of several other models sold in China and Germany indicates that even after a 30% duty, many Chinese EV models would still enjoy a strong EU profit premium,” Rhodium Group concluded.

Despite Rhodium's conclusion, China has not responded favorably to the European Union's (EU) new EV import tariffs. China warned that the EU's heightened tariffs on Chinese electric vehicle imports would "harm Europe's interests."

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