Post #7915 by DTB on the Berkshire Hathaway board

Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤

Unthreaded | Threaded | Whole Thread (2)

Post New | Post Reply | Report Post | Recommend It!

No. of Recommendations: 1

Rhodium’s Sebastian said vertical integration – owning the supply chain rather than buying parts from elsewhere – had given it “a lot of control over costs”.

I don't see how owning the parts makers gives you any control over the costs. Certainly it gives you some advantages: control of supply, quality, integration with your product, etc. But control over costs?v if you are a carmaker like Ford that is buying its batteries, you pay market price for batteries. If you are BYD, you have to make them yourself, and you will still end up paying roughly their market price. The market price for a commodity like batteries is, very roughly, the same thing as their cost of production. If BYD could make batteries any more cheaply than its competitors, it would be taking over the market for batteries, but it can't and it isn't.

dtb

Post New | Post Reply | Report Post | Recommend It!

Print the post

Unthreaded | Threaded | Whole Thread (2)

Prev | Next

Announcements

Berkshire Hathaway FAQ

Contact Shrewd'm
Contact the developer of these message boards.

A community forum supporting civilized, and highly helpful, self-educating investors that come together for Shrewdness and merry spirits. These message boards closely follow the look and feel of the old message boards at boards.fool.com prior to the boards redirected to discussion.fool.com. Shrewd'm is not affiliated with the comprehensive and excellent investment website, The Motley Fool (TMF), in any way. The Shrewd commmunity here has owed, and continues to owe, gratitude to The Motley Fool for nurturing a culture of jovial irreverence towards Wall St, and that tradition will continue here.