(Updates with closing share price in second paragraph.)
Nov. 14 (Bloomberg) -- BYD Co. surged the most in Hong Kong trading since announcing in 2008 that Warren Buffett’s Berkshire Hathaway Inc. had bought a stake, after state media reported China will support the use of alternative-energy vehicles.
The maker of the E6 electric car climbed 26 percent to HK$20.85 at the close of trading, the biggest gain since Sept. 29, 2008, and paring this year’s decline to 49 percent. Hong Kong’s benchmark Hang Seng Index rose 1.9 percent.
Alternative-energy cars will be exempt from the current license plate and traffic restrictions in some major cities, Xinhua News reported Nov. 12, citing a government notice issued the day before.
“It’s a short-term bump on the news of the removal of limits on new-energy cars,” said Charlene Gu, a Hong Kong-based analyst at Yuanta Securities HK Co. “Valuations are also beaten down after the declines this year.”
BYD’s Shenzhen-traded stock surged by the 10 percent daily limit. John Li, head of investor relations at BYD, declined to comment when reached on his mobile phone today.
There are 25 Chinese cities currently running trials for alternative-energy vehicles, and local authorities must formulate policies to promote their adoption, including building charging points at government agencies, hospitals and shopping malls, Xinhua reported, citing the notice.
The trial cities should also lower fees for parking, electricity and road usage for such vehicles and adjust purchase policies of government agencies and state-linked companies, according to the Xinhua report. The notice was issued jointly by the National Development and Reform Commission with the ministries of Science and Technology, Finance, and Industry and Information Technology.
BYD’s stock surged 42 percent on Sept. 29, 2008, when MidAmerican Energy Holdings Co., a unit of Berkshire Hathaway, said it agreed to pay HK$1.8 billion for a 9.9 percent stake in the Shenzhen-based company.
BYD, formed 16 years ago as a battery maker, began developing electric cars in 2003 when it expanded into automobile manufacturing. The company began selling its E6 electric car to individuals from Oct. 26, after testing it as a taxi in Shenzhen.
--Editors: Chua Kong Ho, Garry Smith
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