Special Report: Shares Of Berkshire Hathaway-Backed BYD Soar On News Of Luxury Car Orders

(BRK.A), (BRK.B)

Shares of Berkshire Hathaway-backed Chinese battery and vehicle manufacturer BYD Co., Ltd. jumped 14.58% on Wednesday, as the company racked up 40,000 orders in the first two months in China for its new plug-in electric Han luxury car.

BYD’s stock (BYDDF), which had been as low as $4.35 on March 23, closed at $16.22 on Wednesday.

The Han EV will be sold in China at first. Its extended-range version will sell at 229,800 RMB (approximately $32,800), the extended-range variant of the premium model will be priced at 255,800 RMB (about $36,500), and the 4WD high-performance version will sell at 279,500 (about $40,000) RMB. Besides, the PHEV version, Han DM, will sell at 219,800 yuan (about $31,400).

The Han is the first mass-produced model that uses BYD’s ultra-safe Blade Battery, and its performance stats are impressive.

Han EV’s long-range pure electric version has a single-charge range of 605 kilometers (376 miles) based on the NEDC test cycle.

The four-wheel-drive high-performance version possesses an acceleration of 0 to 100km/h (approximately 62 mph) in just 3.9 seconds, making it China’s fastest EV in production, and the DM (Dual Mode) plug-in hybrid model offers 0 to 100km/h in 4.7 seconds, making it the country’s fastest hybrid sedan.

The Han series comes with the world-first MOSFET motor control module, which fuels the car’s record-breaking 3.9 second 0-100km/h acceleration, and the Han’s braking distance requires only 32.8 meters from 100km/h to a standstill.

The Han EV’s extended-range version’s 605-kilometer cruising range also gives it the world’s highest energy recovery rating. The Han DM hybrid model comes with 81 kilometers of pure-electric cruising range and over 800 kilometers of integrated range, along with five different power modes.

The company claims that its ultra-safe Blade Battery makes it twice as safe compared to EVs using traditional ternary lithium battery packs. The Han’s DM is powered by a “seven-dimensional quad-layer” safety matrix that remain stable at high temperatures.

Mr. Wang Chuanfu, President of BYD Co., Ltd., said, “The Han has taken ten years from the concept stage to formal mass production,” which he likened to “ten years of sharpening a brilliant sword”. He added, “Through our leading technologies, we have created three benchmarks for flagship EVs in terms of safety, performance, and luxury.”

The Han comes with the latest version of BYD’s DiPilot intelligent driving assistance system, including a wide array of safety features like an adaptive stop-and-go cruise-control system (ACC-S&G), a forward-collision warning system (FCW), a pedestrian identification and protection system, a lane departure warning system (LDWS), traffic sign identification, and much more. The Han can be upgraded with even higher-level functions including BYD’s ICC Intelligent Navigation System, the ICA Integrated Adaptive Cruise System, and the TJA Traffic Congestion Assistance System. In addition, the extended-range premium and 4WD high-performance models provide blind spot monitoring, lane-change assistance, rear collision early warning and other leading functions, which can be upgraded to a comprehensive automatic parking function.

DiPilot also comes with the DiTrainer mode, which selectively turns on assisted driving based on factors such as driving behavior, road conditions, weather, and even driving age. The DiLink 3.0 Smart Network system comes with smart voice upgrades and a DiUI upgrade, with a 15.6-inch Ultra HD 8-core adaptive rotary suspension PAD, bringing the even smarter luxury sedan.

As for styling, BYD’s new Dragon Face design language uses both Eastern and Western design aesthetics. From its striking front grille, its Dragon Claw tail lights and other features, the car’s stylized design creates a striking, confident vehicle that defines a new era for Chinese-made luxury vehicles. The interior is equipped with solid wooden panels, high-quality Napa leather seats, aluminum trims and other high-end materials rarely used in other high-end luxury vehicles.

A Profitable EV Company

BYD recently reported a net profit of 1.66 billion yuan (roughly 242 million U.S. dollars) for the first half of 2020. The net profit rose 14.29 percent over the same period in 2019.

Through June 30, BYD had revenue of 60.5 billion yuan, down 2.7 percent year on year, according to BYD’s financial report filed with the Shenzhen Stock Exchange.

Despite the global pandemic, BYD projects 2.8 billion yuan to 3 billion yuan of net profit in the first three quarters of this year, which would be an increase of 77.86 percent to 90.56 percent from the same period of 2019.

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares. It’s an investment that has paid off handsomely. Berkshire’s original investment of $230 million has grown in value sixteen-fold.

© 2020 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway and BYD, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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