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Shares of Chinese electric vehicle maker BYD soar after exec announces Tesla battery deal

This December 2019 photo shows a robotic arm spray painting car bodywork at BYD Automotive Co.’s Xi’an factory. BYD will supply batteries to Tesla soon,” a senior company executive told a Chinese state media outlet.

Yuan Jingzhi | Visual China Corporation | beautiful pictures

Shares of the electric vehicle manufacturer BYD spiked in trading Wednesday morning after a senior executive said in an interview with Chinese state media that the company is set to supply batteries to Tesla “very soon.”

“Now we are good friends also with Elon Muskbecause we are preparing to supply batteries for [Tesla] very soon,” BYD Vice President Lian Yubo said in an interview with Chinese state media presenter Kate Kui.

According to the company’s latest annual report, rechargeable batteries and photovoltaics (which convert light from the sun into electricity) account for 7.29% of BYD’s total revenue in 2021.

Hong Kong-listed BYD shares rose 2.65%, reflecting broader positive sentiment in the tech world as the Hang Seng Tech index rose 2.84%. Shares of other Chinese electric vehicle makers in Hong Kong also rose, with Nio increased 4.68% while Xpeng a sharp increase of 5.32%.

However, mainland-listed shares of Chinese battery maker and Tesla supplier Contemporary Amperex Technology fell more than 6% following the comments. CATL holds about 25% of the global EV battery market by 2020, far outpacing BYD’s 7%, according to Nomura research.

Elsewhere in Asia, shares of Panasonic in Japan fell about 0.8 percent while South Korea’s LG Energy Solution fell 1.39%. Both companies also supply batteries to Tesla.

– Evelyn Cheng of CNBC contributed to this report.

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