Warren Buffett moves into electric car market with $231 million investment in Chinese firm BYD

29 September 2008

Billionaire investor Warren Buffett, who has traditionally shied from putting his money on the newer information technology companies, has evidently started investing in technologies of the future as well as in traditional sectors.

Only days after announcing a major $5-billion investment in Wall Street giant Goldman Sachs, which recently agreed to change its structure along with Morgan Stanley to a bank-holding company from an investment bank, his holding company Berkshire Hathaway Inc. agreed to pay HK$1.8 billion ($231 million) for a minority stake in BYD Co., China's largest maker of rechargeable batteries. (See: Warren Buffett invests $5 billion in Goldman Sachs

The deal gives MidAmerican a foothold in the Hong Kong listed firm, which is developing electric-hybrid cars that can also run on petrol as a back-up fuel.

Berkshire Hathaway unit MidAmerican Energy Holdings Co, that recently made a bid for Constellation Energy (See:Warren Buffett's MidAmerican Energy to acquire Constellation Energy for $4.7 billion), will buy 225 million BYD shares, equivalent to a stake of about 10 per cent, in the Shenzhen-based manufacturer, according to a statement issued on Saturday.

According to BYD's website, its 130,000 workers produce information-technology products including nickel-cadmium and lithium-ion rechargeable batteries, mobile-phone displays, keypads and housings; laptop-computer keypads, and more. On the vehicle side, the company produces electric cars, ranging from economy to luxury models, as well as car moulds and car parts.

Berkshire Hathaway is tapping into rising global demand for environmentally friendly technology. The partnership with MidAmerican would help BYD bring its electric vehicles and other environmental protection measures to the global market, Wang Chuanfu, the Chinese company's chairman, said in the statement.