Shares of Chinese electric vehicle (EV) makers were plunging Friday morning. Nio (NYSE: NIO), XPeng (NYSE: XPEV), and Li Auto (NASDAQ: LI) lost between 12.5% and 17% at the lows of the morning. As of noon ET, Nio was still lower by 7.1%, XPeng was down 14.1%, and Li dropped 8.3%. It wasn't news from these companies that caused the plunge, though. It was thanks to global EV leader Tesla. 

Tesla cut prices for its vehicles in China for the second time in less than three months. Investors feel that means a demand problem is ongoing -- or accelerating -- and are fleeing China-based EV stocks as a result. 

It also means that Chinese buyers can spend less to buy Tesla's Model 3 sedan or Model Y SUV than for the China-based manufacturers offerings. Tesla now offers the Model 3 for the equivalent of about $33,000 in China, about 30% cheaper than it sells for in the U.S. The Model Y can now be had for less than $40,000 in China. 

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Source Fool.com