Billionaire Co-founder Of BYD Wang Chuanfu's Story: Warren Buffett's Bet vs Elon Musk's Envy

Just one-tenth the size of Elon Musk¡¯s Tesla(in terms of market cap), BYD recently added another feather to its hat.

Warren Buffett-backed BYD beat Tesla to become the world¡¯s largest manufacturer of electric vehicles in the final months of 2023.

BYD¡¯s success story is legendary as it¡¯s a classic example of rags to riches. Its founder was an orphan belonging to one of the poorest regions of China. With his determination and grit, he became the billionaire founder of the world's leading producer of electric cars.

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Meet Wang Chuanfu, son of rice farmers who was raised by his elder siblings.

Chuanfu, born in 1966 in Anhui province, was brought up by his elder siblings following the passing of his rice farmer parents. He secured a scholarship to pursue chemistry at Central South University (formerly Central South Industrial University), and later earned a master's degree in battery technology from the Beijing Non-Ferrous Metal General Research Institute (now GRINM Group).

Following his tenure as a government researcher, Chuanfu relocated to Shenzhen, a burgeoning innovation center, attracted by its status as a Special Economic Zone.

29-year-old Chuanfu and His Cousin Lu Xiangyang Founded A Cell Phone Battery Manufacturing Company - BYD

Forbes

In interviews, Chuanfu mentioned that the name initially didn't have a specific meaning. Over time, it gained two fitting nicknames: "Build Your Dreams" and "Bring Your Dollars."

Within four months, they established an office building and a factory with the help of a $300,000 investment from Chuanfu's cousin, as reported by The Wall Street Journal.

BYD's strategy from the outset was straightforward: mimic successful products and maintain minimal costs.

The objective was to reproduce products manufactured by companies such as Toyota, Sanyo, and Sony, but at a lower cost than their Japanese counterparts.

Rather than investing in costly machinery, Chuanfu opted to hire a large workforce on temporary contracts, allowing him to circumvent wage hikes, according to the Journal.

By 2002, BYD had established dominance in the rechargeable battery market, with clients such as Motorola, Nokia, Sony Ericsson, and Samsung. Chuanfu's success also earned him a spot on the Forbes Chinese rich list.

In 2003, He Acquired Tsinchuan Automobile Which Was Failing Terribly And Renamed It BYD Auto

In 2005, BYD introduced the F3 sedan, which quickly gained popularity in China for its affordability compared to similar models like the Toyota Corolla. It eventually became a top-selling vehicle in the country by the late 2000s.

Warren Buffett's Backing

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In the late 2000s, Warren Buffett, seeking opportunities in China's burgeoning automotive market, heeded the advice of his partner Charlie Munger and directed his focus toward BYD.

Referring to Chuanfu, Munger had told Buffett: "This guy is a combination of Thomas Edison and Jack Welch ¡ª something like Edison in solving technical problems, and something like Welch in getting done what he needs to do. I have never seen anything like it."

During a tour of their facilities, Chuanfu purportedly ingested battery fluid to showcase the cleanliness of his batteries and impress investors, as per the Journal. Despite Berkshire Hathaway's initial offer to purchase a 25% stake in BYD, Chuanfu was hesitant to relinquish a significant portion of his company.

Also Read: Rs 1.9 Crore! BYD Reveals Car To Challenge Lamborghini & Ferrari

In 2008, Berkshire Hathaway finally invested a whopping 232 million dollars in BYD.

Buffett's endorsement garnered global investor interest and propelled BYD's ascent. The company's value surged by $5.1 billion, catapulting Chuanfu to the top of Forbes China's rich list for the first time in 2009.

Not Just Cars, BYD Is Now The World's Biggest Maker Of Battery/Electric Buses

BYD has emerged as the world's largest manufacturer of battery-electric buses, boasting over 50,000 units operational worldwide. Additionally, the company has over 1,000 vehicles either on the road or in production within the United States. Its expansive operations include a substantial factory located in Lancaster, California, where it manufactures buses alongside other vehicles like trucks and forklifts.

BYD Founder Chuanfu¡¯s Net Worth

Chuanfu's net worth is estimated at $14.8 billion(Rs 1.2 Lakh Crore approx), as per the Bloomberg Billionaires Index.

Rivalry With Tesla

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Back in 2011, Tesla CEO Elon Musk laughed at BYD's cars during his interview with Bloomberg and said, "I don't think they have a great product." This was followed by BYD taking away Tesla¡¯s crown of the world¡¯s largest manufacturer of EVs.

Musk recently reacted to this old interview byte saying, "That was many years ago. Their cars are highly competitive these days."

At present BYD is worth about $78 billion, which is only a tenth of Tesla's market value but it sure has Musk¡¯s attention!

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