At the end of the annual Berkshire shareholders' meeting, Tesla CEO Elon Musk shouted from afar, suggesting that Buffett buy Tesla stocks.
Unfortunately, Buffett has stated in the past two years that he is not interested in investing in the electric vehicle industry. Musk's hope is likely to be dashed again.
Musk recommended stocks to Buffett across the board
On Sunday Eastern Time, Musk commented on Buffett on Twitter, saying, "He should build a position in Tesla. This is an obvious move."
His comment was in response to a tweet from a netizen suggesting that Berkshire Hathaway sell its entire $135 billion stake in Apple and instead buy Tesla.
Just the day before Musk's statement, Berkshire Hathaway had just held its annual shareholder meeting, during which the company revealed that it had indeed reduced its stake in Apple by about 10%.
Unfortunately, Musk's dream of Berkshire investing in Tesla stocks may never come true. This is because both Buffett and the late Charlie Munger were not optimistic about the investment prospects of the fiercely competitive automotive industry.
"Stock God" keeps a respectful distance from the electric vehicle industry
In fact, Buffett and Munger are not unfamiliar with investing in electric vehicle manufacturers, as Berkshire Hathaway acquired a 10% stake in BYD as early as 2008 and achieved substantial returns. But at Berkshire's shareholder meetings in the past two years, Buffett has expressed a similar view: the electric vehicle industry is too competitive.
At the 2023 shareholder meeting, Buffett said, "Charlie and I have long felt that the automotive industry is too difficult. In this industry, you have many competitors from all over the world who will not disappear. It seems like there are winners at all times, but this does not give you a permanent position."
"I think I know the direction of Apple's development in the next 5 or 10 years... but I don't know what the automotive company will look like in 5 or 10 years," Buffett added.
These views were supported by Munger. Munger stated at last year's shareholder meeting that although electric vehicles are growing rapidly, they are also accompanied by huge capital costs and risks:
"This will bring huge capital costs and risks, and I don't like huge capital costs and risks."
At this year's shareholder meeting, Buffett reiterated this viewpoint once again. When asked if Buffett would invest in the new energy vehicle industry, he said:
"I don't think we will pay too much attention to the field of new energy vehicles for now, because we don't believe that this track can determine the final winner now."
Musk has recommended stocks more than once
In fact, this is not the first time Musk has suggested that Berkshire Hathaway invest in Tesla.
As early as 2008, Musk had hoped to introduce Berkshire's investment to Tesla. Although Tesla was valued at only $200 million at the time, Musk was rejected by Munger. According to Musk's recollection on Twitter in 2022, "When I had lunch with Munger, he told the whole table about various ways Tesla would fail. This made me very sad."
Obviously, Musk has been holding this matter to heart. After Tesla's stock price has now surged thousands of times, Musk has mentioned this on Twitter more than once.
Last February, when a netizen asked what stocks Berkshire should buy, Musk still replied, "Starting with T..." to suggest Tesla.
In November last year, Musk once again exclaimed on X, "It's too bad that he (Buffett) didn't invest in Tesla when its market value was only 0.1% today, haha."