Warren Buffett: 'I salute' Elon Musk for trying to improve a product

  • Warren Buffett says Elon Musk is "trying to do something to improve a product and I salute him for that."
  • But, he added, "if you're selling some commodity product you can't [raise prices because of a strong brand.] You need a moat."
  • Last week Musk criticized Buffett's investing strategy of looking for companies with a "moat," or a buffer to maintain an edge over competing brands or business models. "I think moats are lame," the Tesla co-founder said during the company's earnings call. "What matters is the pace of innovation."

Billionaire investor Warren Buffett said Monday he respects the efforts of Elon Musk, head of electric car maker Tesla.

"He's trying to do something to improve a product and I salute him for that," Buffett said on CNBC's "Squawk Box." "The American public will decide whether it's a success, and it's not easy."

Last week, Musk criticized Buffett's investing strategy of looking for companies with a "moat," or a buffer to maintain an edge over competing brands or business models. "I think moats are lame," the Tesla co-founder said during the company's earnings call. "What matters is the pace of innovation."

Buffett responded over the weekend by saying that moats are still working for certain companies, despite technological advancements. "Elon may turn things upside down in some areas. I don't think he'd want to take us on in candy," the Berkshire Hathaway CEO said Saturday during the conglomerate's annual meeting in Omaha.

"There's just certain things you are not much inclined to be dissastified with," Buffett added Monday on CNBC. "But if you're selling some commodity product you can't [raise prices because of a strong brand.] You need a moat."

"I've never said anything negative about Elon," Buffett said.

The Berkshire chairman and his longtime investing partner and vice chairman, Charlie Munger, spoke to the tens of thousands attendees on a wide range of topics from their massive stake in Apple to missing out on Google and Amazon to bashing bitcoin as "rat poison."

— Buffett joins "Squawk Box" for three hours, 6 a.m. ET to 9 a.m. ET, with special guests Munger and Microsoft co-founder and philanthropist Bill Gates.

With Berkshire's 2018 annual meeting in the books, users can revisit the highlights in CNBC's Warren Buffett Archive, which houses searchable video from 25 full annual meetings, going back to 1994, synchronized to 2600 pages of transcripts. The Warren Buffett Archive also includes 500 shorter-form videos arranged by topic, CNBC interviews, a Buffett Timeline, and a Berkshire Portfolio Tracker.