Recently, Berkshire Hathaway’s decision to sell about 13% of its stake in Apple has garnered significant attention from investors, including billionaire Elon Musk.
Taking to Twitter-X to address the matter, Elon Musk suggested that Warren Buffett should have sold off his entire $135 billion worth of Apple shares to invest in Tesla instead.
“He should buy Tesla stock. That’s the bright path,” Musk wrote.
Warren Buffett and Charlie Munger
However, according to Business Insider (BI), Elon Musk’s dream of receiving investment from Warren Buffett is likely never to materialize.
Previously, when Buffett’s right-hand man, Charlie Munger, was still alive, both had made rather pessimistic remarks about the electric vehicle industry.
Elon Musk Advises Warren Buffett to Buy Tesla Stock After Selling Apple but Gets Criticized by Warren Buffett and Charlie Munger
It’s worth noting that Berkshire Hathaway had previously invested in a 10% stake in BYD, China’s largest electric vehicle manufacturer, so they are not entirely unfamiliar with the industry.
However, despite their success with BYD, both Buffett and Munger expressed skepticism about the electric vehicle industry during the 2023 shareholders’ meeting.
“Charlie and I have long felt that the auto industry is too difficult. It’s a market with too many global competitors who will never give up competing. While there will always be winners in certain periods, it won’t guarantee everlasting victory,” Buffett stated.
“I think I know where Apple will be in 5-10 years…but I don’t know where a car company will be in 5-10 years,” Buffett added.
Similarly, Buffett’s right-hand man Charlie Munger, before his passing, also believed that despite the explosive growth of the electric vehicle industry, it still requires too much capital while posing significant risks.
“This industry requires too much capital while the risks are too high. I don’t like the kind of investment that spends a lot of money with such high risks,” Munger remarked.
At the recent annual shareholders’ meeting in 2024, Buffett indirectly commented on the electric vehicle industry as Berkshire invested in auto insurance.
“If accident rates could be reduced by 50%, it would be great for society,” Buffett noted.
Elon Musk Advises Warren Buffett to Buy Tesla Stock After Selling Apple but Gets Criticized by Warren Buffett and Charlie Munger
Therefore, if Elon Musk’s self-driving technology could reduce accidents by 50%, Buffett’s perspective on the industry might change. However, some experts doubt this possibility as the US Department of Justice is still investigating Tesla for its self-driving technology’s involvement in several accidents.
“Tesla has been playing with the idea of eliminating auto insurance through self-driving technology, but so far, they haven’t succeeded. Time will tell, but I think self-driving technology will only shift the costs from drivers to the technology providers in accident cases,” remarked Ajit Jain, director of Berkshire’s insurance division, suggesting that Tesla would be held responsible for accidents caused by their self-driving technology.
