Why did Charlie Munger think so highly of BYD, and what were his key judgment criteria?

Why Is Charlie Munger So Bullish on BYD?

Hey there! I'm a seasoned investor who loves digging into the stories of Warren Buffett and Charlie Munger. Charlie Munger is Buffett's legendary partner, and together they steer Berkshire Hathaway. It's fascinating how Munger champions BYD—let me break down why. He doesn't praise lightly; his view is rooted in value investing: finding undervalued companies with strong potential and holding them long-term.

First, Munger’s Take on BYD

Munger has publicly called BYD’s founder, Wang Chuanfu, a "genius" and BYD itself a "miracle." He sees BYD not just as an EV maker but as a powerhouse in batteries and new energy. Back in 2008, Munger urged Buffett to invest in BYD (via CITIC Securities), when the company was far from today’s spotlight. The result? That investment has delivered massive returns for Berkshire, and Munger still holds BYD shares today.

What’s Behind His Judgment?

Munger has a razor-sharp eye—he looks beyond surface data to assess a company’s core and long-term potential. Here’s his logic in plain terms:

Wang Chuanfu’s exceptional talent: Munger admires Wang above all. He likens him to a blend of "Thomas Edison and Jack Welch"—combining inventive brilliance with corporate leadership. Wang started as a battery engineer, building BYD from a small factory into an EV giant. Munger believes such leaders solve complex problems, like BYD designing cars from scratch while producing its own batteries—a rarity in auto manufacturing. Simply put, Munger trusts that "a capable leader makes a reliable company."
BYD’s tech and innovation edge: Starting with batteries, BYD expanded into EVs. Munger recognized its lead in new energy, like its Blade Battery (safe and efficient), which cemented BYD’s global EV position. His investing philosophy targets companies with a wide "moat"—unmatchable advantages. BYD’s vertical integration (producing most parts in-house) cuts costs and speeds up development, something Munger deeply respects. Think Apple designing its own chips; BYD makes its batteries and motors, avoiding external dependencies.
Value investing lens: An undervalued gem: As a value investor, Munger avoids chasing trends and seeks bargains. When investing in 2008, BYD’s stock was cheap, and Chinese EVs were overlooked. But he foresaw the long-term shift toward new energy, turbocharged by China’s policy support. Result? BYD evolved from a small battery maker to a top global EV seller. Munger’s mantra: "Buy cheap, hold until it’s valued right"—BYD’s trillion-dollar market cap has multiplied his initial investment many times over.
Risk and global vision: Munger weighed risks like geopolitics but believed BYD’s competitiveness would win globally. Today, BYD’s exports to Europe and Southeast Asia prove him right.

In short, Munger’s optimism about BYD isn’t a whim—it’s grounded in deep analysis of leadership, technology, and markets. If you’re keen on value investing, check out Munger’s book Poor Charlie’s Almanack for more insights. BYD’s story shows that great companies aren’t always flashy at the start—patience pays off. Feel free to ask if you have more questions!