CHINA'S BYD Co surged the most yesterday in Hong Kong trading since announcing in 2008 that Warren Buffett's Berkshire Hathaway Inc had bought a stake, after state media reported China will support the use of alternative-energy vehicles.

The maker of the e6 electric car climbed 26 percent to HK$20.85 (US$3.45) , the biggest gain since September 29, 2008, and paring this year's fall to 49 percent. Hong Kong's Hang Seng Index rose 1.9 percent.

Alternative-energy cars will be exempt from the current license plate and traffic restrictions in some major cities, Xinhua news agency reported over the weekend, citing a government notice.

"It's a short-term bump on the news of the removal of limits on new-energy cars," said Charlene Gu, a Hong Kong-based analyst at Yuanta Securities HK Co. "Valuations are also beaten down after the declines this year."

BYD's Shenzhen-traded stock surged by the 10 percent daily limit. John Li, head of investor relations at BYD, declined to comment when reached on his mobile phone yesterday.

There are 25 Chinese cities running trials for alternative-energy vehicles, and local authorities must formulate policies to promote their adoption, Xinhua reported, citing the notice.