China’s completely new auto rules might please Elon Musk although hurt Warren Buffett

Tesla car dealership in Shanghai taken on March 17, 2015.

Johannes Eisele | AFP | Getty Images

Tesla car dealership in Shanghai taken on March 17, 2015.

The completely new policy is actually seen as a boon to Tesla’s plans to build its own plant in Shanghai. which project was thought to be under threat because the U.S. firm did not want to partner which has a local Chinese firm.

In March, Musk replied to a President Donald Trump tweet to complain about the 25 percent import duty U.S. cars pay to be sold in China.

He said “I am against import duties in general, although the current rules make things very difficult. the item’s like competing in an Olympic race wearing lead shoes,” he said.

Last week, China’s President Xi Jinping vowed to lower tariffs for foreign autos and also also also enforce the legal intellectual property of foreign firms.

While the completely new rules over tariffs and also also also ownership may benefit big foreign auto firms looking to manufacture in China, domestic carmakers could suffer.

BYD Company is actually a Chinese any of automobiles, buses, forklifts, rechargeable batteries and also also also trucks. the item currently includes a partnership with German auto firm Daimler to build luxury electric cars.

In 2008, MidAmerican Energy Holdings, a subsidiary of Warren Buffett’s Berkshire Hathaway, invested about $230 million for a 10 percent stake in BYD. Potentially meaning which Berkshire Hathaway’s investment could be negatively affected by the completely new rules.

Shenzhen-listed shares of BYD dropped by more than 2.4 percent Tuesday, with much of which selling recorded after the state planner’s announcement.

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