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Guys, I cannot believe I only just discovered this story. This is absolutely insane. We've been talking for a long time about how Toyota missed the boat on Tesla. You know, Toyota and Tesla had a joint partnership and then Toyota just got out of that and they lost out. They sold their Tesla shares, which would have been worth nearly as much as the entire Toyota company itself.
But who knew that Warren Buffett and Elon Musk actually sat down and had lunch in 2008? Elon Musk basically said to Warren Buffett at the time, 16 years ago, he said to him, you know, just invest a bit of money into us and I promise you we'll reward you. Well, what happened was unfortunate for Berkshire Hathaway investors, put it that way.
Hello, my friends. Welcome to the channel. I'm Sam Evans. You're watching The Electric Viking. Great to see you. Thank you for tuning in. Back in 2008, Warren Buffett and Charlie Munger flew to China. There they were convinced by the founder of Himalayan Capital in the US, who is a I believe was a Chinese citizen, but he moved to the US.
He convinced them to purchase a stake in BYD. Now, Berkshire Hathaway made billions of money. They made billions from that. It's one of their best investments they ever made. But if they had invested just a very small sum into Tesla or even the same amount into Tesla as what they did in the BYD, they would have made billions and billions of dollars.
The figure is very, very hard. It's very hard to put a number on it. But Musk basically said, "Munger could have invested in Tesla at 200 million valuation when I had lunch with him in late 2008." So, to give you an idea on the difference there, today's current Tesla valuation is 547.7 billion. 547.7 billion.
Musk valued the company in 2008 at 200 million. So, if you put just a million dollars in, I mean, literally lunch money for Warren Buffett at the time, that million would have turned into close to a billion dollars. That's insane. Now, Berkshire Hathaway spokesman Mark Hamburg was he was approached about this story cuz Elon Musk tweeted this and he never responded.
So, Berkshire Hathaway, they they never commented on this. Munger's passing though in November, shortly before his 100th birthday, could in theory open the door to an investment by Berkshire Hathaway. Buffett is at least more admiring of Musk. Now, it's true that Buffett did not invest in Tesla because of Charlie Munger.
He didn't like Elon Musk personally, probably doesn't like him now even though he's in the grave. But, Munger really was pretty vocal in his his dislike of Musk. And the other thing worth pointing out is that Warren Buffett, he's more of a value investor. He usually makes safe bets in companies with strong brands like Apple and Coca-Cola or when he spots blood in the water such as with his purchase of Goldman Sachs shares at the height of the Lehman crisis.
That was a pretty good buy, Goldman Sachs during that period of time. I I was watching Buffett at that time wondering what he'd do. And when I saw that, I thought that's very savvy. But, one of his less savvy investments, guys, and let's be fair, Buffett has been a genius investor, but investing in General Motors and holding General Motors stock for more than 10 years until he completely dumped his entire position only a few months ago, that's one of the worst decisions that Buffett ever made.
I mean, imagine if he had purchased that much in Tesla. He couldn't have cuz Tesla wasn't even worth that much when he initially bought uh Motors stock. But, if he had, if he could have bought the entire company. Anyway, on Sunday Musk renewed his appeal to the Oracle of Omaha to bless him and his company with a confidence-boosting investment.
Now, it would do that, wouldn't it? This definitely would boost uh Tesla stock, I think. People would see, "Oh, Berkshire Hathaway, Warren Buffett, give the tick of approval to buying Tesla stock." Then, you know, a lot of people a lot of um retail investors would probably follow. Responding to a post by Galileo Russell, former non-executive director of failed EV startup Arcimoto, who urged Buffett to buy Tesla shares, Musk agreed.
He should take a position in Tesla. It's an obvious move. I think that's a a kind of a pretty smart tweet here from from Musk. But, the only thing is here, to be fair, Musk is is perceived as being very unpredictable at the moment. He just sacked his entire Supercharger team, who were long considered an unbeatable strategic advantage.
And, well, Tesla clearly pivoting away from their core business, selling cars, toward robot taxis and robotics. Now, I think that makes sense, but that's not Warren Buffett's thing. He's not really into that kind of pivot. That's perceived as being too risky, which is understandable. At 56 times estimated earnings for next year, the multiple probably isn't attractive to a value-minded investor like Buffett.
The outlook for Musk's EV business has darkened considerably. First quarter global sales of Tesla dropped not just sequentially over the final 3 months of 2023, but year-on-year as well. That was the first such decline since the pandemic brought the global economy to a complete standstill in 2020. The latest sign that Tesla's car business is under pressure came on Monday when Germany's motor vehicle authority published new car registrations for the month of April.
Tesla volumes dropped by a third of the previous year's period when EV makers still benefited from generous government subsidies that expired in December. Now, Germany removing those subsidies has definitely impacted the EV market in in in the country significantly. Sales of Tesla's cars in Germany are now down by 36% through the first 4 months this year.
Now, we don't know if at production stoppages at Tesla's Berlin plant may have affected those sales as Tesla has Well, they do apparently have plenty of finished cars in inventory. The decline is reflective of a broader malaise that has led to some to speculate that Tesla sales could be noticeably lower this year versus last year.
So, that's probably not what Warren Buffett is um down for. He's looking at growth, sustainable slow growth. And Tesla isn't really interested in that anymore. They're swinging for the fences, clearly. They believe just selling cars as a business is kind of a uh maybe not the best strategy for the company, and I personally 100% agree with them.
They're basically following the strategy Tony Seba laid out back in 2014, and Musk talked about it many years ago as well, which was to change the paradigm of human history with robotics, with human-like robots, with cars that drive themselves. The future, I believe, is going to be what Musk says it is.
Now, whether or not Tesla are able to crack these codes though, that's a completely different story. But, you've got to admit that Tony Seba, who's made the most accurate predictions of any futurist in the world, has predicted pretty much what Tesla is aiming to do will play out, whether or not Tesla crack it or not.
Somebody will. The question is who, where, and when. What do you guys think? Let me know in the comments. Now, Warren Buffett though, if he were to purchase a stake in Tesla, that would certainly change people's impression of the company, probably for the better. I think it would be a good move as well.
I know this is very much against the current the current trend. Everyone's sort of against Tesla right now. That seems to be the the thing. But, what did Warren Buffett say? Remember what he said? One of his most famous sayings, "Be fearful when others are greedy and greedy when others are fearful." Right now, people are fearful of Tesla. Maybe it's the time to be greedy.
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