On Friday morning we made a change to our portfolio. We removed First Majestic Silver (NYSE: AG), and replaced it with BYD Company (OTCMKTS: BYDDF). While we think AG still retains a good production growth profile, our mission is to follow the best funds we can find. Our reference fund no longer favors AG, so in accordance to Brain Trust Profit’s mission we followed suit.

Warren Buffett first invested in BYD Company (whose name is an acronym derived from “build your dream”) in 2008 through Berkshire Hathaway. He has held on to his 225,000-share stake for nearly nine years through thick and thin. We have long had BYDDF on our radar and currently carry the stock in our sister publication Real World Investing. Today, we added it to our Brain Trust Profits portfolio as well.

Although Tesla (Nasdaq: TSLA) garners most of the fanfare on Wall Street (in no small part due to the charisma of Elon Musk), BYD Company is actually the top electric-vehicle (EV) seller in the world, helped by Beijing’s mandate to fight pollution and curb emissions, which has made China the world’s biggest EV market. Sales of new-age vehicles (NEVs) in China reached 507,000 units in 2016—409,000 EVs and 98,000 plug-in hybrids. Those figures represented a 65 percent growth for EVs and 17 percent growth for hybrids.

For BYD, sales of NEVs increased almost 70 percent last year to 96,000 units. Of those, approximately 86,000 were passenger cars. Electric-bus sales improved by 120 percent to more than 10,000 units. Overall, BYD’s global share of NEVs is now about 13 percent. Its China share is about 23 percent. The top-three selling NEVs last year were all BYD models—two hybrids and one pure EV. BYD also sells traditional cars that runs on gasoline (326,000 units last year), though the growth is nowhere near that of NEVs—last year the growth was under 2 percent.

The company has promoted the development of electric public transport, specifically pure electric buses and taxis. It’s now the top seller of electric buses with more than 10 meters in length. It has found customers for its electric buses and taxis in numerous international markets as well, including the U.S., Canada, and Europe.

BYD also launched its first monorail in October of last year in Shenzhen, and expects similar monorails to enjoy rapid development in other cities. The development of rail transit is specifically mentioned in China’s 13th Five Year Plan, which means it should have strong government support.

It is not all roses, of course. BYD hit a bump in the first quarter this year largely due to a 20 percent government reduction of subsides for EVs by 20 percent. Beijing may phase subsidies out completely by 2020.

BYD’s first-quarter sales and profits fell steeply (34 percent and 29 percent respective) on a year-over-year basis, which raised concerns. However, although the cut clearly creates some pain in the short term, we believe that the reduction and elimination of government subsidies in the long run may actually make BYD more dominant, because the cuts would more likely drive out the smaller competitors that rely on the subsidies to remain competitive. Indeed, Beijing’s intends to weed out the weaker, smaller players in order consolidate the EV industry in the hands of quality companies. Five EV manufacturers had been accused of scamming the government on subsidies, further increasing the pressure to clean up the industry.

Beijing recently announced that it would start to implement a carbon trade scheme in 2018. Under this plan, companies will be issued permits that allow them to emit a certain amount of carbon dioxide, and those who exceed their quota must purchase carbon credits from other permit-holding companies. This will increase economic incentives to reduce emission and transition toward a lower-carbon economy. Thus, structurally, under the government’s mandate, the Chinese economy is clearly headed toward low-carbon and carbon-free forms of energy.

Even oil companies, who stand to be hurt from the development of EVs, expect continued development of the EV industry. Total SA (NYSE: TOT), one of the largest oil producers in the world, thinks that EVs could make up 30 percent of new-car sales by 2030—currently EV’s share of car sales is only about 1 percent. By and large, oil companies have been trimming their forecasts for long-term oil demand because of this expected continual growth in EV demand.

Indeed, China’s sales numbers seem to be rebounding. In May China NEV sales were about 40,000, a 49 percent increase compared to May 2016. BYD’s NEV sales for the month came in at 8,000. So while margins may be depressed for a while due to the subsidy reduction, the sales volume increase and cost-cutting efforts should be able to make up some lost ground.

Though BYD is known primarily as a car maker, a significant part of its revenues actually come from mobile phone handset and assembly services (38 percent) and rechargeable battery and photovoltaic (7 percent). These are double-digit percent sales growers as well.

We were on the sidelines in anticipation of the subsidy cuts. Now that China’s NEV industry has shown some resilience, we have added BYD as a recommendation, though given still some uncertainty surrounding profitability and the out-sized role that the Chinese government—whose goal to do what’s best for the country’s future may not necessarily be great for corporate bottom lines—tends to play in its economy, we’ve rated the stock a high-risk holding. The shares trade at 23-times expected forward twelve-month earnings, a fairly reasonable valuation given its expected earnings growth of about 20 percent a year.