How Buffett's EV Battery Stock Pick Turned $230 Million Into $2.4 Billion—And Why It's Not Too Late to Invest in 2026

When Charlie Munger introduced Warren Buffett to the concept of buying quality companies at reasonable prices back in 1965, he set in motion a philosophy that would generate market-beating returns for decades. Fast-forward to 2008: Munger spotted an emerging opportunity in the electric vehicle market that would ultimately deliver over 2,000% returns. The company wasn’t Tesla, which was just launching its flashy Roadster that year. Instead, it was BYD, a Chinese manufacturer whose approach to EV battery stocks and vehicle production would quietly revolutionize the industry. Today, with BYD trading at just 18 times forward earnings while growing far faster than traditional competitors, the question isn’t whether this EV battery stock belongs in your portfolio—it’s whether you can afford to wait.

The Story Behind a $230 Million Bet on EV Battery Stocks

Berkshire Hathaway’s 2008 investment in BYD represents one of the most prescient calls in modern investing. Buffett deployed $230 million to acquire roughly 10% of the company when few Western investors understood what BYD was building. While the market was captivated by Tesla’s sleek Roadster positioning itself as a luxury vehicle, BYD was quietly engineering something more ambitious: economical, mass-market electric vehicles. The contrast couldn’t have been sharper. Tesla aimed for the high-end segment; BYD targeted affordable transportation.

This strategic divergence reveals why EV battery stocks like BYD would eventually dominate. The Chinese automaker didn’t start as a car manufacturer at all—it began as a battery maker, building expertise in cost reduction through vertical integration. By controlling the supply chain from lithium mining to component manufacturing, BYD developed an extraordinary competitive moat. This wasn’t just business strategy; it was survival. The company brought battery technology in-house, manufactured key machinery independently, and reinvested profits into R&D. This flywheel of low costs enabling customer wins, which fueled technology investment, which attracted more customers, proved unstoppable.

When BYD finally entered vehicle manufacturing in 2003 through a small automaker acquisition, it integrated its battery and electrical expertise seamlessly. The e6, launched as an affordable five-door compact, embodied this philosophy: high-quality electric vehicles without premium pricing. The result was an investment that grew nearly 10-fold by value, even as Buffett trimmed his stake to approximately 4.4%—still worth $2.4 billion as of early 2026.

The EV Battery Stock That Survived the Valley of Death—And Thrived

Most EV battery stocks faced existential challenges in the 2010s. BYD was no exception. The cannibalization of its traditional vehicle sales by electric models, combined with fierce global competition, nearly drove the company to bankruptcy by the late 2010s. This is where most investors would have abandoned ship. Berkshire didn’t.

The turning point arrived in 2020 with the launch of BYD’s blade battery—a revolutionary cell design offering superior safety, extended range, longer longevity, and higher power density. Suddenly, BYD could build EVs with performance capabilities that rivaled premium competitors while maintaining price points around $20,000 and $12,000. Those aren’t just competitive prices; they’re market-dominating ones.

The company’s relentless focus on cost control through vertical integration, particularly its strategic moves like acquiring lithium mining rights in Brazil in 2023, continues to reinforce competitive advantages. Beyond hardware, BYD developed its own advanced driver-assistance system called “God’s Eye,” now pursuing SAE Level 4 autonomous driving classification for premium models—all included at no extra cost. This bundling strategy is transformative: you’re getting EV battery stocks with premium autonomous capabilities at mass-market valuations.

From Niche Player to Global EV Battery Leader: Market Dominance Emerging

The numbers tell the story. In the first quarter of 2025, BYD reported over 1 million total vehicle sales, with 416,000 pure battery electric vehicles—a 39% year-over-year increase. Tesla, by contrast, sold 336,000 vehicles in the same period, down 13% year-over-year. By early 2026, market analysts like Counterpoint Research had confirmed what seemed unthinkable just a year earlier: BYD would surpass Tesla in annual electric vehicle unit sales, capturing an estimated 15.7% of global EV market share versus Tesla’s 15.3%.

This isn’t a temporary surge. It reflects structural advantages. BYD’s profitability mirrors Tesla’s with a 7% operating margin in 2024, yet the company is far younger in its EV journey. More impressively, management guided for first-quarter earnings growth between 85-118%—a stark contrast to Tesla’s expected 4% profit decline in the same period. For investors seeking EV battery stocks positioned to capture years of profitable growth, this performance gap matters.

The valuation looks equally compelling. Trading at approximately 18 times forward earnings, BYD offers growth at a fraction of historical multiples for high-performing automakers. This is particularly striking for a manufacturer outproducing Tesla on volume while maintaining comparable or superior margins.

Why EV Battery Stocks Like BYD Represent the Next Investment Wave

The fundamental thesis remains intact: the transition to electric vehicles is accelerating, and the winners will be companies that can produce EVs profitably at scale. BYD checks every box. Its vertical integration model, engineering talent, battery expertise, and obsessive cost discipline create a moat that widens with every quarter. The company isn’t just competing on price—it’s redefining what’s possible at that price point.

For portfolio managers and individual investors alike, the case for adding EV battery stocks to holdings remains compelling in 2026. While Buffett’s original investment has delivered extraordinary returns, the current valuation and growth trajectory suggest the story is far from over. The question investors should ask isn’t whether BYD belongs in a diversified portfolio—it’s how much exposure to the EV battery stock revolution makes sense for your investment horizon and risk tolerance.