Buffett’s Berkshire Hathaway trims BYD stake to below 5%

Warren Buffett’s Berkshire Hathaway has pared its stake in BYD to less than 5%, further unwinding its long-term bet on China’s largest electric-vehicle maker.

The Omaha, Nebraska-based investment firm recently lowered its stake in BYD to 4.94% from 5.06%, selling 1.4 million H shares at an average of 246.96 Hong Kong dollars (US$31.64) each, according to an exchange filing Monday. Dropping below the 5% threshold means that Berkshire will no longer be required to disclose its sales of BYD stock on the Hong Kong stock exchange.

BYD shares were recently 3.9% lower in both Hong Kong and Shenzhen on Tuesday. The company’s Hong Kong-listed shares have risen about 10% this year, while its China-listed shares have gained nearly 30%.

Analysts said the stake sale wasn’t surprising given that Berkshire has been regularly trimming its stake in BYD since August 2022, shortly after shares hit a record high and when the Buffett company’s shareholding exceeded 20%. At its peak in 2008, Berkshire held a nearly 40% stake.

“It’s a profitable investment, but eventually Berkshire will sell all of its [shares] of BYD,” said Angus Chan, an auto sector analyst at Bocom International.

Nomura analyst Joel Ying cited U.S.-China geopolitical tensions as one of the likely reasons for the unwinding.

Berkshire “made it clear that they will engage with more opportunities in U.S.” markets, Ying said. Intense competition in China’s EV market is likely another major reason for trimming the BYD stake, he said.

Berkshire didn’t immediately respond to a request for comment.

Buffett said in May that his late business partner, Charlie Munger, had been the one to initially push to buy into BYD, but that going forward, Berkshire would focus its primary investments in the U.S.

Berkshire in early 2023 sold all its holdings in Taiwan Semiconductor Manufacturing Co., the world’s largest contract chip maker, partly due to concerns about rising tensions between China and Taiwan.

Write to Jiahui Huang at Jiahui.Huang@wsj.com