- Warren Buffett’s Berkshire Hathaway should buy Tesla stock, according to Elon Musk.
- “He should take a position in Tesla. It’s an obvious move,” Musk tweeted about Buffett on Sunday.
- Detailed below is why Warren Buffett probably won’t invest in Tesla, despite the encouragement.
Warren Buffett should buy Tesla stock, according to Elon Musk.
“He should take a position in Tesla. It’s an obvious move,” Musk tweeted about Buffett on Sunday, in response to a tweet that suggested Berkshire Hathaway should sell its entire $135 billion stake in Apple and instead purchase Tesla.
The comments came a day after Berkshire Hathaway’s annual shareholder meeting, in which the company revealed that it did trim some of its stake in Apple by about 10%.
But Musk’s dream of Berkshire Hathaway giving Tesla its stamp of approval and buying the stock is probably never going to happen.
That’s because previous comments made by Buffett and the late Charlie Munger did not shine a favorable light on the ultra-competitive automotive industry.
To be fair, Buffett and Munger are no strangers to investing in electric vehicle makers, as Berkshire Hathaway did acquire a 10% stake in BYD back in 2008, so anything could happen.
But despite their successful BYD investment, Buffett and Munger said at Berkshire Hathaway’s 2023 annual shareholder meeting that investing in the automotive industry is just too hard.
“Charlie and I for long have felt that the auto industry is just too tough. It’s just a business where you’ve got a lot of worldwide competitors they’re not going to go away. And it looks like there are winners at any given time, but it doesn’t get you a permanent place,” Buffett said at the time.
“I think I know where Apple’s going to be in five or ten years… I don’t know what the car companies are going to be in five or ten years,” Buffett added.
Those sentiments were backed up by Munger, who said that while electric vehicles are experiencing wild growth, they also come with huge capital costs and risks.
“It’s imposing huge capital costs and huge risks, and I don’t like huge capital costs and huge risks,” Munger said.
This isn’t the first time Musk suggested Berkshire Hathaway should invest in Tesla.
