Developing | Chinese lithium battery stocks surge as Tesla decides to set up ‘dreadnought’ factory in Shanghai

Shares of Chinese companies that make products from battery testing equipment to electrolytes jumped in mainland trading after Tesla said it will build its first car plant outside the US in Shanghai.

Fujian Nebula Electronics, which supplies testing equipment to lithium battery producers, jumped by the 10 per cent daily limit to 29.25 yuan in Shenzhen, with trading volumes almost double its 30-day average.

Guangzhou Tinci Materials Technology, an electrolyte producer, surged 6.8 per cent to 43.53 yuan and Shenzhen Senior Technology Material, a maker of coating membrane for lithium batteries, advanced 6.3 per cent to 37.69 yuan.

The news, which came from Tesla’s shareholder meeting on Tuesday, provided a buffer to Chinese electric car-related stocks that have been rattled this year by the government’s decision to raise the bar for subsidising purchases of new-energy vehicles.

A gauge tracking Chinese lithium battery-linked stocks has declined 12 per cent this year, according to data compiled by Great Wisdom.