Electric vehicle (EV) stocks were heading lower Friday, and there was a good explanation for it. At the lows of the session, China-based Nio (NYSE: NIO), luxury electric sedan maker Lucid Group (NASDAQ: LCID), and specialty delivery vehicle start-up Canoo (NASDAQ: GOEV) had each dropped by between 4% and 7%. As of 1:35 p.m. ET, all three stocks had recovered somewhat, but Nio was still down 1.7% and Lucid was lower by 3.1%. Canoo, however, was up by 1.5%.

It wasn't any news from or about these companies that had investors selling their shares, though. It was what many considered bad news from EV leader Tesla (NASDAQ: TSLA), which announced it was expanding its vehicle price cuts beyond China to include EVs sold in Europe and the U.S.

On the surface, that could be great news for its rivals, especially for Nio and Lucid. Nio is a growing competitor in the critical Chinese market, and Lucid's luxury Air sedans are direct competition for Tesla's Model S in the U.S. In fact, since Tesla announced it was slashing prices in China earlier this month, Nio's share price has gained more than 10%.

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Source Fool.com