Portrait of Charlie Munger
Business · organisation
Wikipedia (opens in new tab)

Charlie Munger on Tesla

Acknowledges success, favors BYD (strong)

TL;DR

Charlie Munger called Tesla's success a 'minor miracle' while clearly favoring Chinese competitor BYD's manufacturing capabilities.

Key Points

  • He called the success of Elon Musk's Tesla a "minor miracle" in the car business during an interview on CNBC.

  • Munger, along with Warren Buffett, invested in Tesla's competitor BYD, a move he called the best contribution he made at Berkshire Hathaway.

  • In 2009, Munger reportedly told a group that Tesla would fail, although the CEO later noted that Munger could have invested at a very low valuation.

Summary

Charlie Munger has publicly expressed a nuanced view on Tesla, ultimately viewing its success as a remarkable achievement in the American auto industry. He famously described the feat of establishing a successful new auto company like Tesla as a "minor miracle," acknowledging the real contributions the company has made to civilization. This praise for the accomplishment is tempered, however, by his significant expressed admiration for Tesla's primary competitor in China, BYD. He considers BYD's founder to be better at the actual making of things than the CEO of Tesla.

Despite acknowledging the difficulty of what Tesla achieved, Munger indicated that he and Warren Buffett chose not to invest in the electric vehicle maker, instead opting to invest heavily in BYD. This BYD investment has yielded what Munger considers an exceptional rate of return for Berkshire Hathaway. While Munger has historically expressed skepticism regarding Tesla’s long-term viability, as evidenced by past statements made to the company's CEO, his later commentary maintains an appreciation for Tesla's disruptive status while simultaneously championing BYD's manufacturing and leadership in China.

Key Quotes

“He can do things you can't do. He's a fanatic that knows how to actually make things with his hands. He's closer to ground zero, in other words. The guy at BYD is better at actually making things than Elon is.”

Frequently Asked Questions

Charlie Munger holds a mixed view: he acknowledges Tesla's success as an amazing and rare feat for an American auto company, calling it a "minor miracle." However, his sentiment leans toward favoring the Chinese company BYD, whose founder he believes is superior in hands-on manufacturing.

Yes, his position appears to have evolved from overt skepticism to tempered praise mixed with a clear preference for a competitor. He once told a group that Tesla would fail, yet later called its success a major accomplishment.

Munger stated that the CEO of BYD is better at actually making things than the CEO of Tesla, suggesting Tesla's leadership is outclassed in certain manufacturing aspects. Despite this, he recognized that Musk can accomplish things that others cannot.