In a recent tweet, Elon Musk urged Warren Buffett to consider investing in Tesla stock. Musk believes that it is an obvious move for Buffett to take a position in the company. However, despite Musk’s encouragement, it is unlikely that Berkshire Hathaway will invest in Tesla.
In fact, previous comments made by Buffett and his late business partner Charlie Munger have not been positive about the automotive industry. While Berkshire Hathaway did acquire a 10% stake in BYD in 2008, Buffett and Munger have expressed their skepticism about investing in the auto industry.
At Berkshire Hathaway’s 2023 annual shareholder meeting, Buffett and Munger shared their concerns about the automotive industry. They believe that it is a highly competitive industry with worldwide competitors that are unlikely to disappear. The uncertainty of the future of car companies has made Buffett hesitant to invest in the industry.
Munger also highlighted the high capital costs and risks associated with electric vehicles, despite their rapid growth. These factors have further deterred Berkshire Hathaway from considering investments in the automotive sector. Musk’s suggestion that Berkshire Hathaway should invest in Tesla is not the first of its kind, but the company’s previous statements suggest that it is unlikely to happen.