Certain media outlets recently claimed that Tesla will acquire a 20% stake in China-based EV manufacturer BYD for US$36 billion. Though copious in details, the news ultimately turned out to be fake.
This news started as a rumor on the internet. After Chinese media reported on the rumor as an unverified event, certain media attached “foreign media” to the news and, after a week’s worth of gestation, produced the aforementioned fake news’ clickbaity headline. After reporters from China-based Sina inquired BYD directly, BYD officials said the rumors were “fake news” verbatim.
In reality, only last week did BYD release about $3.9 billion worth of stocks in the HKEX, which infused it with sufficient cash for the next wave of R&D activities, while capitalizing on the market buzz and pocketing some of the change.
In the past year, as EVs became an attractive investment, Tesla, with its skyrocketing share prices, dominated the news waves, and with good reason. However, those who did even a little homework would know that BYD’s share prices quadrupled during the period too. In addition, one of the main shareholders of BYD is the Buffett-owned Berkshire Hathaway, which holds more than a quarter of total shares released in the HKEX.
The fact that Tesla is even allowed to do business in China while being completely foreign-funded – a feat few can claim – is already a miracle. Therefore, it makes sense that China is not allowing Tesla to swallow up a key, state-funded company like BYD. At most, Tesla will be allowed to buy a small-fry company as a pittance. On the other hand, BYD is a leader of the commercial EV industry not only in China, but also in the rest of the world, while also being in possession of the patented Blade Battery, which it designed, making BYD a relatively reliable party among Chinese EV manufacturers.
The topic of EV has remained in the spotlight since 2021, with all parties attempting to cash in on the craze. Within the span of a month, we’ve seen no fewer than two exclusive reports claiming insider sources. Those who are financially invested in the topic are hereby advised to do their due diligence prior to diving headfirst instead of being guided by dubious information sources.
(Image: BYD)