[ralph84]

Auto manufacturing is low margin and capital intensive. BYD is valued as an auto manufacturer. Tesla is not.

Even all of that aside, the idea that foreign investors will be allowed to meaningfully participate in the upside of Chinese companies is questionable. Every Chinese company is one recapitalization away from zeroing out the common stock owned by foreigners. What are they gonna do, sue in Chinese court?

[toomuchtodo]

For quite some time, Warren Buffett was a BYD investor via Berkshire Hathaway. If you tried to get into EV stocks after the Tesla exuberance started, you were already mostly too late.

> The filing by Berkshire’s energy subsidiary recorded the value of its BYD investment as zero as of the end of March, down from $415 million at the end of 2024.

> Buffett’s company began investing in Shenzhen-based BYD in 2008, when it paid $230 million for about 225 million shares, equivalent to a 10% stake at the time.

> It began selling those shares in 2022 after BYD’s share price had risen more than twentyfold.

Warren Buffett’s fund exits BYD after a 17-year investment that grew over 20-fold in value - https://www.cnn.com/2025/09/22/investing/warren-buffet-berks... - September 22nd, 2025

[profsummergig]

This is fascinating, because from what I've heard, Warren Buffett did not favor tech stocks. Does anyone know what gave Buffett the faith that this company was a real deal?

[Seattle3503]

That investment predates Xi Jinping's leadership.

[aeonfox]

> Every Chinese company is one recapitalization away from zeroing out the common stock owned by foreigners.

But in practice, wouldn't such an event on X large Chinese company have a cascade effect on stock values of all other Chinese companies?

[eru]

Maybe, but China might not care too much.

They have precedence for cutting down their tech giants and their tuition industry recently.

[nonethewiser]

Isn't BYD a VIE? Most "internet" (ie tech) companies in China cannot legally be owned by foreigners. And what you get is some proxy based in the Cayman Islands that is circumventing Chinese law. Not something I'd touch with a ten foot pole.

[dworks]

The VIE structure has been officially ratified by the highest levels of regulators in China. It does not circumvent Chinese law.

[tensor]

> BYD is valued as an auto manufacturer. Tesla is not.

This in no way addresses the accusation that Teslas valuation is built on nothing. BYD also has self driving software. So what exactly does Tesla have that is not cars and batteries?

The ludicrous humanoid robots with dubious use cases? That’s not it either because the stock was absurdly high before that was a thing.

I have never seen a better example of how arbitrary and irrational markets are than Teslas valuation.

[jhancock]

> What are they gonna do, sue in Chinese court?

If your hypothetical happens, yes. China has been working hard to turn domestic investment away from housing. A trustworthy domestic stock market is key.

[davidw]

And are they making progress? Genuine question, I don't know much about China.

[blitzar]

> Every Chinese company is one recapitalization away from zeroing out the common stock owned by foreigners

See TikTok as an example.

[dworks]

The future of the Chinese economy depends on being able to access the global capital markets, which means that by extension, its future depends on foreign investors being demonstrably "allowed to meaningfully participate in the upside of Chinese companies".

[jocaal]

Funnily enough, the future of the Chinese economy depends on being able to access their local market. The chinese people save too much and aren't buying their own products