Piercer feat from Tasha's Cauldron of Everything states that on critical attack roll you add an additional weapon damage die to the damage roll. Does this extra dice also double on a critical hit?
Ex: Critical hit with dagger with Piercer feat would be 2d4 + 2x1d4 (piercer feat) = 4d4 Right?
or is it just 2d4 + 1d4 (piercer feat) = 3d4
No. It is similar to the Brutal Critical feature from Barbarians where, on top of the doubled die, an extra dice is rolled. Brutal Critical has an entry in the 2016 Sage Advice Compendium clarifying this with an example:
With Brutal Critical and a greatsword, does a barbarian get to roll an additional 1d6 or 2d6? If you have the barbarian’s Brutal Critical feature and score a critical hit with a melee weapon attack, you get to roll one additional damage die when rolling the weapon’s damage. It’s one die, no matter what weapon you’re using. For example, if the weapon normally deals 1d8 damage, you roll 3d8 (1 for the weapon, 1 for the critical hit, and 1 for Brutal Critical). If the weapon normally deals 2d6 damage, you roll 5d6 (2 for the weapon, 2 for the critical hit, and 1 for Brutal Critical).
From the example, we can see only one dice is rolled, and it is not doubled.
