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BYD rises after report electric cars exempted from usage tax

BYD Co, the automaker partly owned by Warren Buffett’s Berkshire Hathaway Inc, rose to a two-month high in Hong Kong after the People’s Daily today reported China’s government will exempt three of the company’s electric car models from vehicle-usage tax charges.

BYD gained as much as 6.7 percent to HK$22.20, the highest intraday level since November 15, before changing hands at HK$21.50 as of 1:45 pm in Hong Kong. The stock has risen 28 percent this year, compared with a 3.1 percent increase in Hong Kong’s benchmark Hang Seng Index.

As many as 42 electric passenger cars were exempted from payment of vehicle-usage tax earlier this month amid efforts by the Chinese government to encourage use of electricity and other alternative energy in personal transportation. The existing annual usage levy ranges between 60 yuan ($9.50) and 5,400 yuan based on engine size.

BYD, which started sales of its E6 electric cars to individual buyers in November, is counting on such vehicles for future growth as it faces slowing demand and mounting competition with gasoline-run autos. BYD sold a total of 309 E6 cars to taxi-fleet operators and individual motorists in the first 11 months of last year, according to the China Association of Automobile Manufacturers.

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