Shares of Chinese electric vehicle (EV) maker XPeng (NYSE: XPEV) spiked Friday morning, reversing a downtrend for the week. XPeng shares were down by almost 11% this week before they jumped by more than 10% Friday morning. As of 10:50 a.m. ET, the stock was still up by 8% for the session. 

Ironically, what caused investor angst earlier in the week seems to be what is driving the stock higher Friday. That's because early results show the market's initial negative reaction to the price cuts that XPeng announced may have been misguided.

XPeng slashed prices on its EVs earlier this week in response to Tesla's price cuts in China. Investors first viewed XPeng's decision as a sign of desperation, and a tactic that could hurt the company's long-term prospects. That still may be true, but it now appears that -- for Tesla, at least -- price cuts are driving a surge in demand among Chinese consumers. 

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Source Fool.com