Charlie Munger’s assessment of Wang Chuanfu the BYD CEO remains as relevant today as it was in 2008.

To truly grasp the disruptive force that is BYD, one must first understand the typical product development lifecycle of a legacy automaker. Replacing a best-selling model is a monumental task, often taking years of cautious planning and incremental updates. BYD, however, operates at a different velocity and acceleration.

The company recently confirmed it will replace the immensely popular Sealion 6 (sold as the BYD Song Plus in China)—a model with over 1.57 million global sales—just months after launching its successor, the Sealion 06. This speed is not just fast; for the traditional auto industry, it is almost unbelievable. This agility is powered by a formidable engine: an army of 120,000 engineers dedicated solely to research and development, filing patents daily and relentlessly pushing the boundaries of innovation as recently mentioned by Stella Li. The industry has yet to fully comprehend what is about to come from this technological juggernaut.

Amid this innovation, a common narrative recently emerged, questioning BYD’s future and pointing to Warren Buffett’s Berkshire Hathaway selling of its entire stake in the company. At Hybrid Motors Africa, we interpreted this event differently.

We believe Buffett’s exit is less more about BYD’s decline and more a consequence of the recent passing of Charlie Munger. It was Munger who originally championed the investment in BYD back in 2008, famously convincing a skeptical Buffett. Munger saw in BYD what others, including Tesla’s CEO Elon Musk, initially missed and laughed at. With his key advocate gone, it is plausible to say that Buffett made a strategic decision to exit a highly profitable investment, locking in gains rather than navigating a future without his partner’s unique insight.

In fact, we contend that BYD’s current challenges, including the recent massive recalls, represent not a downfall but a potential opportunity. For discerning investors, this period of negative sentiment and stock pullback could be an ideal entry point. Backed by its colossal 120,000 engineering force and under the steadfast leadership of its founder, the engineer Wang Chuanfu, BYD is uniquely positioned to overcome these short-term hurdles.

The late Charlie Munger’s assessment of Wang Chuanfu remains as relevant today as it was in 2008. He described the BYD founder as a “combination of [General Electric’s] Jack Welch and Thomas Edison”—a rare blend of managerial genius and inventive as well as Innovative brilliance. A company led by such a visionary, and powered by an army of 120,000 engineers, has only one direction to go from a temporary setback: up.

Kwame Gonza
CEO, Hybrid Motors Africa