Berkshire Hathaway has completely sold its shares in BYD, ending a 17-year investment that was very successful in Asia. This full exit follows a gradual reduction of their stake since 2022. BYD acknowledged Berkshire’s support as a long-term partner. According to CNBC’s Warren Buffett Watch, Berkshire Hathaway Energy, the division that owned the shares, reported the investment as worthless by March 31. A representative confirmed that all shares have been sold. BYD’s public relations head thanked Berkshire for its support since 2008. Berkshire started decreasing its BYD shares in 2022. By mid-2024, their ownership had fallen to under 5%. This year’s complete exit signals the end of one of Berkshire’s most successful investments in Asia. With Berkshire Hathaway’s exit from BYD now confirmed, traders dealing in derivatives should expect downward pressure on the stock. This news was anticipated due to the gradual sell-off since 2022, and it removes a vital long-term endorsement for the company. We suggest buying put options that expire in the next 30 to 60 days to take advantage of this renewed negative sentiment. This decision comes as growth in the overall electric vehicle (EV) market slows down, reinforcing a negative outlook. Reports from mid-2025 show that global EV sales growth has dropped to around 15% year-over-year, a sharp decline from the over 25% growth rates seen in 2024. This maturation of the market makes high-valuation stocks like BYD more susceptible to negative influences. The final exit is likely to increase implied volatility in BYD options. We see this as a chance for strategies that profit from price movements, although simply buying puts seems to be the most straightforward approach. Historically, when a notable investor like Berkshire completely divests, it often prompts a market re-evaluation, which can lower a stock’s price for several quarters. We can recall the persistent pressure on Chinese technology stocks between 2021 and 2023 when major international funds began to cut back their investments. That period taught us that such a significant exit is not a brief event but can indicate a longer trend. Therefore, traders might consider longer-dated puts or put debit spreads to manage costs while betting on continued declines. The effects of this exit will likely go beyond BYD, impacting the entire Chinese EV sector and related supply chains. We expect that traders will interpret this event as a signal to short an index of Chinese EV makers or buy puts on competitors like Li Auto and Nio. Berkshire’s move may also reflect broader concerns about geopolitical risks and peak growth in that specific market.

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