BYD shares in China and Hong Kong recover following exploding taxi incident

Gasgoo.com (Shanghai May 30) - BYD's stocks made a strong recovery following an official statement from the manufacturer on Tuesday that its E6 electric car met government crash test standards, the Beijing Times reported today. The manufacturer made headlines following an incident last Saturday where an E6 electric taxi in Shenzhen caught fire after colliding with another car, killing a total of three people.

There were concerns that the E6's lithium ion battery triggered the explosion, which, if proven true, would have serious implications for several of the manufacturer's products. At the time, BYD refused to make an official comment on the incident, saying it was waiting for the official police investigation to conclude. However, the manufacturer's statement today seems to have put those worries to rest. According to the statement, the E6's battery did not ignite even after being severely deformed during government conducted crash tests.

Soon after the accident, prices of both BYD's mainland A-shares and Hong Kong H-shares plummeted. The former fell over five percent on Tuesday morning, finishing at 23.50 yuan ($3.715). However, share prices quickly recovered following the statement, which was made around noon. A-shares increased 2.32 percent while H-shares rose a full 5.5 percent. The former rose to a high of 24.70 yuan ($3.905), while the latter finished at 16.08 Hong Kong dollars ($2.072).

The E6 EV has been operating in Shenzhen's taxi fleet for two years now, with over 15 million km of total driving distance accumulated. According to BYD, there have been 18 accidents in the past, none of which have resulted in an explosion like last Saturday's, which may have actually been caused by the other vehicle's gas tank imploding. BYD stated that is confident that the incident will not affect its future sales, and is still waiting for the police investigation to finish.