XPENG-W surged 5.13% in intraday trading on Wednesday, extending a strong rebound as sentiment in the electric vehicle sector improved broadly.

The rally came after earlier fears over targeted regulatory scrutiny on XPeng were dispelled. An internal source disclosed that a recent on-site inspection by China's MIIT at XPeng and GAC Aion facilities was a routine industry-wide safety and production consistency check, not a focused action. Additionally, the market had already digested the overhang from XPeng's recall of over 33,000 X9 vehicles due to front air spring defects in prior sessions.

The broader new energy vehicle sector also provided a tailwind, with LI AUTO-W surging over 8%, NIO-SW gaining over 3%, and BYD COMPANY rising over 2% in early trading, reflecting improved industry sentiment as domestic demand showed signs of sequential improvement.