Soaring Raw Material Costs Drive EV Makers to H1 Losses, Industry Margins Hit Five-Year Low

Recently, a new energy vehicle (NEV) manufacturer announced in a public statement that it expects a net loss of RMB 1.5 to 1.8 billion for the first half of 2024, a sharp decline compared to a net profit of RMB 29.41 billion during the same period last year. The announcement cited rising raw material prices as one of the primary factors contributing to the losses. The price of lithium carbonate—a key battery material—has surged from RMB 70,000 per ton last year to RMB 180,000 per ton, significantly increasing the cost of power batteries. Additionally, prices of chips, semiconductors, copper, aluminum, and petrochemical products have all risen broadly, further intensifying cost pressures across vehicle manufacturing. To cope with rising costs, some automakers have shifted part of the burden onto consumers by reducing promotional discounts at the retail level, charging separately for intelligent driving systems, or raising prices on updated models. Meanwhile, certain suppliers have maintained original selling prices while cutting their own costs through measures such as using recycled materials or substituting cheaper additives. Other suppliers, however, have ceased deliveries altogether due to unsustainable cost pressures, forcing automakers to switch to new suppliers offering lower quotes. As a result, the overall profit margin in the automotive industry has dropped to 3.4%, the lowest level for the same period in the past five years. Automakers and supply chain companies are now employing various strategies to control costs and preserve profitability, passing varying degrees of this pressure down to end consumers.