2026 Auto Market Sees Widening Price Divide: ICE Vehicles Drop, EVs Rise

In early 2026, China's auto market witnessed an unusual price divergence: classic internal combustion engine (ICE) vehicles such as the GAC Honda Fit started at just RMB 66,800—a decade-low price that sold out rapidly—while electric vehicles (EVs), pressured by rising costs, were forced to raise prices. The primary driver was a surge in upstream raw material costs: lithium carbonate prices climbed to RMB 174,000 per ton, copper exceeded RMB 100,000 per ton, and DRAM memory chip prices soared by 180%, collectively adding over RMB 1,000 to the cost per vehicle. Meanwhile, Beijing issued an additional 80,000 new energy vehicle (NEV) license quotas in an effort to boost sales. However, consumer willingness to purchase remained weak, dampened by extended vehicle replacement cycles, a wait-and-see attitude toward emerging technologies, and the prevailing belief that “buying later means paying less.” Automakers, in response, have shifted to “financial warfare”—offering incentives like seven-year zero-interest loans—as a disguised form of price competition. The market has now entered an elimination phase: models priced below RMB 150,000 compete on low cost; those in the RMB 150,000–300,000 segment rely on enhanced smart features to maintain pricing stability; and luxury vehicles above RMB 300,000 depend on technological differentiation to sustain premium pricing. Overall, the 2026 auto market no longer follows a uniform trend of price increases or decreases—divergence has become the dominant theme.