BYD, backed by Warren Buffett's Berkshire Hathaway, has seized the top position in China's car market, ending Volkswagen's 15-year reign.

Citing data released by the Chinese Passenger Car Association, Fortune reported that BYD, the electric car (EV) giant based in Shenzhen, China, dominated domestic sales for the 12th consecutive month in December, selling almost 30% more on new car sales than the previous year.

With the help of government subsidies, BYD held nearly 12% of the national market, narrowly beating Volkswagen for the top spot on a yearly basis. 

Warren Buffett-Led Conglomerate Berkshire Hathaway Investment in BYD

The Warren Buffett-led conglomerate Berkshire Hathaway first invested in BYD in 2008, acquiring a 10% stake for $230 million. Last year, Fortune reported that the billionaire investor has been slowly selling off his position, but the investment has yielded him some $2.5 billion so far.

Buffett's early vision for the previously no-name startup to evolve into one of the world's major automakers seems to have materialized with BYD's current success.

German-based Volkswagen, one of the EV tech's first adopters, faces challenges in the Chinese market as it struggles to remain competitive worldwide.

The recession in Germany and persistent inflation, which impacted Volkswagen's production costs, made it even harder for the company to compete with Chinese automakers boosted by subsidies.

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China Leads in the Global EV Industry

According to World Economic Forum data, China dominates the global EV industry, with 59% of all new EVs sold in China in 2022, when it also manufactured 64% of the world's EVs.

BYD and other Chinese producers contribute to China becoming the world's largest auto exporter, surpassing Japan. According to the Chinese Association of Automobile Manufacturers, one in every three vehicles sold in China is electric.

BYD's global success is evident. The carmaker also reportedly overtook Tesla as the world's top EV maker in the final quarter of 2023.

Last August, BYD chairman Wang Chuanfu said the time has come for Chinese brands to enter the global arena, adding that there was an "emotional need for the 1.4 billion Chinese people to see a Chinese brand becoming global."

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