By Danilo Masoni

(Reuters) – An outsized rally in Volkswagen shares has drawn the attention of Germany’s top market watchdog as heavy volume trading spurred by the carmaker’ electric vehicle ambitions set the stock for one of its best weeks ever.

Shares in Volkswagen rose as much as 9% in Frankfurt on Thursday before paring some of their gains after regulator BaFin said it was monitoring the share price move.

A spokeswoman said BaFin was watching the move in a “routine way”, without elaborating.

A raft of announcements on its electric vehicle expansion strategy to challenge market leader Tesla has lifted Volkswagen shares more than 50% so far this year, luring institutional and retail investors globally.

The 83-year old group unveiled this week plans to build 12 battery cell plants in Europe by 2030 and expand infrastructure for charging electric cars.

The surge has lifted Volkswagen’s market value above $160 billion and making the carmaker the biggest company of the DAX benchmark index, ahead of software group SAP.

Volkswagen’s main shares were up 1.6% by 1123 GMT, off earlier highs but still up more than 23% so far this week, while the less liquid ordinary stock was up 6.3% and up 42% on the week in its best run since 2008.

Gains in the ordinary shares and the American ADRs have been linked to growing interest from retail investors in the United States, which have contributed to a boom in trading volumes on the stock.

“We fundamentally like the name … we think not only institutional, but also a wave of private investors is increasingly interested,” wrote Barclays analysts.

(Reporting by Danilo Masoni in Milan, additional reporting by Christoph Steitz in Frankfurt; editing by Jason Neely and Steve Orlofsky)