Warren Buffett’s Berkshire Hathaway recently tweeted that it should sell its stake in Apple and invest in Tesla instead, prompting a response from Elon Musk. Despite Musk’s encouragement, Buffett is unlikely to take a position in Tesla as previous comments made by him and the late Charlie Munger have expressed skepticism about investing in the automotive industry.
At Berkshire Hathaway’s 2023 annual shareholder meeting, Buffett and Munger shared their concerns about the highly competitive nature of the automotive industry, with worldwide competitors unlikely to disappear. The uncertainty of the future of car companies has made Buffett hesitant to invest in the industry, further deterred by the high capital costs and risks associated with electric vehicles despite their rapid growth.
Musk’s suggestion that Berkshire Hathaway should invest in Tesla is not new, but given previous statements from Buffett and Munger regarding their skepticism towards investing in the automotive sector, it seems unlikely to happen.