(Yicai Global) March 11 -- Dynanonic's shares climbed today after the Chinese supplier to BYD and Contemporary Amperex Technology said that it will invest CNY1 billion (USD143.8 million) to build a new plant in southwestern China that would make materials commonly used in cobalt-free batteries, a technology that Tesla has been looking into adopting.

Dynanonic's stock price [SHE:300769] rose 3.62 percent to CNY169.30 (USD24.33) this morning with a CNY7 billion (USD1 billion) market cap. 

The company has penned an investment agreement with Qujing's municipal administration in Yunnan province about the lithium iron phosphate factory, built to meet rising demand, the Shenzhen-based nanomaterials firm said in a statement yesterday, without disclosing details about timing or capacity. 

In February, Chinese cobalt-related shares slumped after Tesla said that it was in talks with CATL to use lithium iron phosphate batteries in the Shanghai-made Model 3s. However, according to a later filing released by China's Ministry of Industry and Information Technology, the Californian carmaker is not planning to ditch cobalt-containing power packs as the other cheaper option turns out to be less energy-efficient than expected.

Editor: Emmi Laine