Green vehicle shares jump as China mulls petrol car ban

Shares in electric vehicle makers and lithium battery manufacturers soared in Asia on Monday after a Chinese official said Beijing was looking to ban petrol cars in the world's biggest auto market.

Xin Guobin, vice minister of industry and information technology, told a forum in the northern city of Tianjin at the weekend that officials had started "relevant research" and were working on a timetable to phase out combustion engine cars.

"These measures will promote profound changes in the environment and give momentum to China's auto industry development," Xin said in remarks broadcast by CCTV state television.

While the government did not give a date for the ban, the announcement drove up the shares of Chinese automakers.

BYD, the pioneer of the new energy vehicle (NEV) market in China, closed up 4.07 percent in Shenzhen while Anhui Jianghuai Automobile Group, known as JAC Motors, gained 3.40 percent in Shanghai.

JAC Motors said in May it had received government approval for a $734 million joint venture with Volkswagen to produce 100,000 electric cars per year.

Lithium battery makers also surged in Shenzhen, with Shenzhen Desay Battery Technology rallying 3.57 percent while Sunwoda Electronic ended up 5.44 percent.

The government in June introduced draft regulations compelling automakers to produce more electrically-powered vehicles by 2020 through a complex quota system.

In Japan, Nissan rose 0.91 percent, Honda was up 1.59 percent and Toyota jumped 1.22 percent.

Battery maker GS Yuasa climbed 2.25 percent while Panasonic, which also makes batteries, rose 0.88 percent.

New energy vehicle sales only account for a small fraction of total vehicle sales in China so far despite government subsidies supporting the sector.

China sold more than 500,000 units of NEVs in 2016, according to official figures, while overall vehicle sales exceeded 28 million.

Chinese car makers in Hong Kong also enjoyed healthy gains. BYD soared 4.55 percent and BAIC Motor Corp added 0.73 percent.

And O Luxe Holdings ended up 7.93 percent after it emerged that Hong Kong tycoon Li Ka-shing had bought a stake in it.

The investment legend took a stake the firm as it is in the middle of buying Japan's GLM, which makes electric sports cars, and plans to license its technology in China, Bloomberg News reported.

source: AFP