Investing.com-- BYD’s Hong Kong listed shares slid further from record highs on Tuesday, after the electric vehicle maker’s recent price cuts sparked increased concerns over higher competition and shrinking margins in the Chinese market.

BYD (HK: 1211 ) fell 3.6% to HK$409.80, and was among the top weights on the Hang Seng index, which shed 0.2%.

BYD rivals Xpeng (NYSE: XPEV ) Inc (HK: 9868 ), NIO Inc (HK: 9866 ), Li Auto Inc (HK: 2015 ), and Zhejiang Leapmotor Technology Co Ltd (HK: 9863 ) fell between 1.7% and 3% in HK trade, also extending recent losses. Geely Automobile Holdings Ltd (HK: 0175 ) fell 3.2%.

Weakness in Chinese EV stocks was driven by BYD and some of its rivals announcing more price cuts and incentives over the past week, sparking concerns over a worsening price war in China’s EV market.

Price cuts and freebies also herald more margin pressure for BYD, which could dampen the company’s otherwise strong earnings. While investors had welcomed BYD’s recent move to offer driver assistance technology for free across several low-cost models, they questioned just how much earnings pressure such a move could herald.

BYD’s shares were also subject to profit-taking after they rushed to record highs last week, on optimism over the company’s overseas expansion. A recent report showed BYD’s EV sales overtook rival Tesla (NASDAQ: TSLA ) for the first time in Europe in April– a major milestone for the company, after it also overtook Tesla in China last year.

European data showed on Tuesday that Tesla’s EV sales in the region slumped nearly 50% in April.