Over a Dozen EV Makers Raise Prices Amid Squeezed Margins and Rising Costs

Recently, more than ten leading domestic new energy vehicle (NEV) brands have successively raised prices on certain models or reduced terminal discounts, with price increases ranging from several thousand yuan to over 10,000 yuan per vehicle. At the same time, some new entrants continue to adopt aggressive low-price strategies—for example, the top-trim Leapmotor A10 is priced at RMB 86,800, while the Hua Jing S offers a large six-seater SUV with Huawei’s intelligent driving features in the RMB 150,000 segment. According to data, in Q1 2026, revenue in China’s auto industry declined slightly by 0.2% year-over-year to RMB 2.4128 trillion, while costs rose by 0.7% to RMB 2.1406 trillion. Profit fell sharply by 18% year-over-year to RMB 78.4 billion, pushing the sales profit margin down to 3.2%—significantly below the 6% average for China’s large-scale industrial enterprises. Persistently rising upstream raw material prices are exerting significant pressure. Higher prices for key commodities such as lithium carbonate and crude oil have driven up costs for power batteries and chemical plastic components. Automakers have limited pricing power and struggle to pass these increased costs downstream. Moreover, heavy reliance on external suppliers for core components like batteries and chips further squeezes profit margins. Data shows that chips and batteries together account for over 50% of the total cost of smart electric vehicles, and leading battery makers’ quarterly profits now exceed the combined profits of multiple automakers. Faced with mounting cost pressures, companies are adopting divergent strategies: some are investing heavily in in-house R&D to cut costs—NIO, for instance, has poured billions of yuan into developing its own chips, expecting to save approximately RMB 10,000 per vehicle; others rely on economies of scale to maintain slim margins; and still others pursue “downgraded pricing” strategies, bringing high-end intelligent features down to vehicles priced around RMB 100,000 to capture market share. Industry analysts note that widespread price hikes in the mid-to-low-end segment remain unlikely in the short term due to intense competition and high consumer price sensitivity. However, if upstream costs stay elevated and industry consolidation fails to accelerate significantly, price increases could gradually spread. The automotive sector has already shifted from an era of volume-driven expansion to one of stock-market competition, where survival hinges on a company’s ability to generate internal cash flow, accumulate core technological capabilities, and build brand trust.