Nio and Li Auto are both up about 30 percent since last Monday, while Xpeng has rallied 70 percent in the same period.

Stocks of electric vehicle companies trading in Hong Kong continue to surge today, after seeing a strong rally last week.

At press time, Nio was up 12.01 percent to HK$104.9, a new high since October 12. Since last Monday, Nio was up 31 percent.

Xpeng rose 20.38 percent to HK$46.95, a new high since October 5. It gained about 70 percent since last Monday.

Li Auto rose 9.49 percent to HK$88.80, a new high since October 6 and a gain of about 33 percent since last Monday.

Leapmotor rose 15.58 percent, while BYD gained 4.08 percent.

Hong Kong's Hang Seng Index rose 3.15 percent and the Hang Seng Tech Index gained 5.93 percent.

For the Chinese EV trio, their big gains continue their epic rally in the US last Wednesday, when Nio rose 21.71 percent, Xpeng rose 47.28 percent and Li Auto rose 18.73 percent

"High level, we think a large part of the rally was caused by a short squeeze as investors were caught being too negative on the group given Covid and competition concerns," Deutsche Bank analyst Edison Yu's team said in a research note sent to investors last week.

On Covid, the policy is indeed shifting to a more hands-off approach, as illustrated by local government announcements in Guangzhou, Chongqing and Zhengzhou in recent days, Yu's team said in their note.

In the past few days, many cities, including Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu, Chongqing and Tianjin, have relaxed their Covid controls and no longer require proof of a negative Covid test for passengers to travel on public transportation.

The most direct signal of China's Covid policy relaxation came on November 11, when China's National Health Commission (NHC) announced 20 measures to significantly optimize existing policies.

Since then, some cities have seen a surge in cases in their quest to loosen controls, which has caused some confusion with policy implementation.

Overall, however, more cities are loosening controls and are becoming more tolerant of growing Covid case numbers.

In terms of company news, both Nio and Li Auto delivered a record number of electric vehicles in November, 14,178 and 15,034 respectively.

Xpeng delivered 5,811 vehicles in November, down 62.8 percent from a year ago, but up 14 percent from October.

The company expects deliveries to increase significantly in December as production of the G9 ramps up under normal operating conditions.

Xpeng gave guidance of 20,000 to 21,000 vehicles for fourth-quarter deliveries when it announced its third-quarter earnings last week, and the numbers already announced mean that the company expects to deliver between 9,088 and 10,088 vehicles in December.