The competition has intensified as traditional automakers and new startups spend billions on EV production, securing supply chains, and infrastructure. Automakers including Tesla have signaled they are willing to suffer lower margins throughBuffett alluded to Ford as a cautionary tale of how unsteady the auto industry can be: "Henry Ford looked like he owned the world with the Model T ... and 20 years later they were losing money," he said.
But Buffett and his right-hand man Charlie Munger said they didn't have an interest in venturing further into the auto business. "Charlie [Munger] and I long have felt that the auto industry is just too tough," Buffett said. "It’s just a business where you’ve got a lot of worldwide competitors, they're not going to go away, and it looks like there are winners at any given time, but it doesn’t get you a permanent place."Berkshire Hathway CEO Warren Buffett answers questions at the annual shareholder meeting in Omaha, Neb. on May 6, 2023.
Munger agreed, adding that although EVs are certainly on the rise, that uptick comes with some significant costs. "The electric vehicle is coming big time, and that’s a very interesting development," Munger said. "At the moment, it's imposing huge capital costs and huge risks, and I don't like huge capital costs and huge risks.""I think I know where Apple’s going to be in 5 or 10 years," he said, "and I don't know what the car companies are going to be in 5 or 10 years.