Source: eCompany Author: Han Zhongnan On June 25th, the Hong Kong Stock Exchange disclosed that Berkshire Hathaway sold 2.0175 million shares of BYD Company Limited on June 19th, with an average reduction price of HKD 234.57 per share, cashing out approximately HKD 473 million, and the shareholding ratio decreased from 6.18% to 5.99%. It is worth noting that on June 11, Berkshire Hathaway just made a reduction and cashed out HKD 311 million. Reviewing the previous information, since the first reduction of BYD in August 24, 2022, the "stock god" Buffett has reduced his holdings of BYD many times. The shareholding ratio of Berkshire Hathaway has been adjusted from 19.92% to the current 5.99%. Some strategic analysts said that once Berkshire Hathaway's shareholding ratio of BYD drops to 5%, Buffett's reduction speed may accelerate. On June 25th, BYD A shares rose by 1.63%, closing at RMB 254.01 per share, and Hong Kong stocks rose by 0.84%, closing at HKD 239.60 per share. In the Berkshire Hathaway shareholder meeting held in May this year, Buffett mentioned BYD, saying that BYD and Costco were the stocks that he and Munger worked together for these years and Munger most firmly advocated buying. Talking about why he reduced holdings of BYD, Buffett said that Berkshire Hathaway's investment in BYD was similar to the investment in Japan five years ago, which was a large investment that was rare outside of the United States. In the future, he hopes to focus more on the United States. In fact, recently, not only has Buffett been continuously reducing his holdings of BYD, but his favorite "apple" has also been greatly reduced. The latest holding situation submitted by Berkshire Hathaway to the US Securities and Exchange Commission (SEC) shows that in the first quarter of 2024, Buffett reduced his holdings of Apple Inc. by about 116 million shares, reducing his holdings of Apple from 49.3% at the end of 2023 to 40.3%. Analysts pointed out that judging from the portfolio adjustment actions, Buffett is withdrawing from the technology sector and returning to the industries he was familiar with before. The most obvious change is that Buffett has re-established a large position in Chubb Ltd. which he previously owned. Buffett also said in a recent letter to shareholders, "Property and casualty insurance provides the core protection for Berkshire's health and growth." "Only take a swing when conditions are right," Buffett believes that unless he can find investment standards with low risk and lucrative returns, he will not spend this money.
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Recently, the US government has decided to significantly increase import tariffs on Chinese products, with the tariff for electric cars increasing by 100%.

According to the announcement of the Office of the United States Trade Representative, some tariff adjustments will be implemented starting from September 27. In addition to imposing a 100% tariff on electric vehicles from China, the United States will also impose a 50% tariff on solar cells from China, and a 25% tariff on steel, aluminum, electric vehicle batteries, and key minerals from China.

Limited impact.

From the perspective of the proportion of tariff increases, it is undoubtedly the electric vehicles from China that are most affected. However, in fact, the United States is not the primary destination for Chinese new energy vehicle companies to go overseas.

Public data shows that in 2023, the number of Chinese pure electric passenger vehicles exported to the United States was 0.0124 million vehicles, accounting for less than 1% of the export quantity and total amount to the United States. It is reported that in the first quarter of this year, the number of Chinese vehicles exported to the United States was only 2,217.

According to industry insiders, the current scale of China's exports of new energy vehicles to the United States is very small, and the actual impact of this tariff increase on China's exports of new energy vehicles is limited. Europe and Southeast Asia are the main export destinations for China's new energy vehicles, and there is still considerable room for growth in the future.

According to the latest data released by the China Association of Automobile Manufacturers, from January to August 2024, China's automobile exports reached 3.773 million vehicles, an increase of 28.3% YoY. During the same period, the export volume of new energy vehicles reached 0.818 million vehicles, with a YoY growth of 12.6%. The momentum of China's new energy vehicles going global is still strong.

Car companies respond

Although industry insiders currently believe that the impact is limited, many car companies with export business in the United States have still taken emergency measures.

Among them, Polestar has already built a factory in South Carolina, USA, complementing the production capacity of its domestic Chengdu factory. At the same time, the company is also preparing for production in South Korea, with the expectation of selling the produced models to Europe and the United States.

Lotus, which has just entered the North American market, has recently revealed its intention to reevaluate its market layout in the United States. Feng Qingfeng, CEO of Lotus Group, stated that under the "tariff threat" in the United States, Lotus is reconsidering its positioning, pricing, and product definition in the US market.

Cui Dongshu, Secretary General of the National Passenger Vehicle Market Information Joint Conference, stated that it is necessary for Chinese automobile companies to export to the United States in order to increase international sales. However, the impact of the United States' increase in import tariffs on electric vehicles from China is currently not significant for China's automobile exports.

Editor/Jeffy