Charlie Munger says he doesn't even try to invest in the extremely challenging auto industry.
The famed investor spearheaded Berkshire Hathaway's bet on China's BYD, now a major EV manufacturer.
Warren Buffett's business partner says BYD's CEO is better than Tesla's Elon Musk at making things.
"Look how hard it would be to go into the auto business and have some big killing," Warren Buffett's right-hand man and Berkshire Hathaway's vice-chairman told the Acquired podcast in a rare, long-form interview released this week.
"Who's going to win, who knows? The whole thing's been thrown way up in the air by all these electric cars, all these big new capital requirements, different ways of selling cars, and plus they've got these tough unions, so I just don't even look at the auto industry."
It's worth noting that Munger convinced Buffett in 2008 to pay $232 million for a 9.9% stake in BYD, a Chinese battery maker that went on to become a major player in electric vehicles. Berkshire disclosed its first cut to the position last August, after it had grown 35-fold in value, and the conglomerate has continued to cash out this year.
The 99-year-old investor described the wager as a venture-capital type investment. He recalled trying and failing to convince BYD's founder and CEO, Wang Chuanfu, not to enter the auto business as it was a "graveyard" for newcomers.
"I may be a big fan, but I'm sort of hanging on by my hat while they lurch around the track," Munger said. "They make me nervous, it's so aggressive," he continued, adding that BYD has "put the foot right to the floorboard."
The legendary stock picker also laid out why he views Wang as a special talent. "He can do things you can't do," Munger said. "He can look at somebody else's auto part and he can figure how to make the goddamn thing."
"He's a fanatic that knows how to actually make things with his hands," Munger continued. "He's closer to ground zero in other words. The guy at BYD is better at actually making things than Elon is."
Munger has previously shared his views on the Tesla and SpaceX CEO. Back in February, Munger hailed Musk's unlikely success in the auto industry, but hinted that he expects BYD to overtake Tesla in the EV race.
"Even if you're a genius like Musk is in some ways, there's always some little BYD that comes out and does better," he noted.
In May, Munger drew a key distinction between Musk, who's working to shift the world to clean energy and travel to Mars, and the Berkshire bosses, who invest in more staid industries like car insurance and fast food.
"He likes taking on the impossible job and doing it," Munger said. "We're different. Warren and I are looking for the easy job."
"We don't want that much failure," he added.
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