EV makers experience price cuts, Tesla and Li Auto slide in premarket.

• On Sunday, Tesla reduced the starting price of its Model 3 in China by 14,000 yuan, bringing it to 231,900 yuan ($32,000).
• Li Auto, a Chinese rival, reduced prices for its models, including the L7, L8, L9, and the newly launched MEGA SUV.
• Hong Kong-listed shares of Li Auto plummeted to an 11-month low Monday.

On Monday, shares of Tesla sank in premarket trading, while China's electric vehicle market saw a 11-month low, after both companies reduced prices of their electric vehicles in various markets due to intense competition.

Tesla reduced the starting price of its Model 3 in China to 231,900 yuan ($32,000) on Sunday, a decrease of 14,000 yuan, according to Reuters. Additionally, the company also cut prices in major markets such as Germany.

Li Auto announced price cuts for its models, including the L7, L8, L9, and MEGA SUV, on its Weibo account on Monday. The cuts were reportedly up to 30,000 yuan.

On Monday, CNBC checked the websites of Tesla and Li Auto and found that their vehicles were priced higher.

During the Monday session, Hong Kong-listed shares of Li Auto dropped 8.3% to their lowest point in 11 months, while shares of other Chinese EV makers also fell — 1.7%, 1.9%, and 0.2%.

With competition in China's EV market intensifying, local automakers are pushing to outdo U.S. rival Tesla by offering fancy tech and competitive pricing.

Macquarie Group's Eugene Hsiao, head of China equity strategy, stated in a research note that all major Chinese EV manufacturers share a common objective: to surpass Tesla as the market leader, while acknowledging that the domestic auto market is currently highly competitive.

Big EV players in China are employing a range of tactics to remain competitive during the impending wave of industry consolidation, according to Hsiao.

Xiaomi unveiled its SU7 electric vehicle this month, priced $4,000 lower than Tesla's Model 3, and boasted a longer driving range.