In 2026, driven by sustained increases in the prices of multiple raw materials, manufacturing costs for new energy vehicles (NEVs) have risen significantly, prompting numerous automakers to adjust their product pricing. Lu Fang, Chairman of Voyah Auto, stated during the Summer Davos Forum in Dalian that widespread price hikes across key inputs—including memory chips, batteries, petrochemical products, aluminum, and steel—have made vehicle price reductions illogical. He emphasized that price increases are highly likely and advised consumers to purchase vehicles sooner rather than later. Data shows that lithium carbonate, a core material for power batteries, surged from RMB 75,000 per tonne at the end of 2025 to over RMB 200,000 per tonne by mid-May 2026—a year-to-date increase exceeding 160%. Morgan Stanley forecasts a global supply-demand gap of 80,000 tonnes of lithium carbonate equivalent in 2026. Zijin Mining noted that lithium resources will remain in a state of tight equilibrium over the long term, with a reasonable price range of RMB 150,000–250,000 per tonne, making a near-term return to lower levels unlikely. Meanwhile, costs for automotive-grade semiconductors have soared sharply. Major suppliers such as STMicroelectronics, Infineon, and Texas Instruments have raised prices twice this year. Memory chip prices jumped by as much as 180% within three months, while high-end intelligent driving chips saw price increases exceeding 300%. Combined with rising prices for industrial metals like copper and aluminum, the comprehensive manufacturing cost of a mainstream NEV priced around RMB 200,000 has increased by RMB 6,000–14,000 compared to the same period last year. Against this backdrop, multiple automakers have already implemented or announced plans for price hikes. In March, Chery’s Exeed brand became the first to raise the price of the high-end ET5 variant by RMB 5,000. Xiaomi increased prices across its entire SU7 lineup by RMB 4,000. BYD raised the price of its optional “God’s Eye B” LiDAR-assisted driving system by RMB 2,100 on select models. Changan’s Qiyuan Q07 Tianshu Intelligent LiDAR Edition saw a RMB 3,000 price increase effective May 7. GAC Aion hiked prices on models including the AION Y Younger and AION S Plus by RMB 3,000–6,000. Tesla raised the Long Range and Performance variants of the Model Y by RMB 18,000 and RMB 20,000 respectively, while also tightening interest-free financing terms. Rumors also suggest the Zeekr 007 GT may see a price increase of RMB 5,000–8,000, though the company has not officially confirmed this. Industry profitability is under significant pressure. According to data from the Passenger Car Association of China Automobile Dealers Association, the auto industry’s sales profit margin dropped to 3.2% in Q1 2026, below the average for downstream industrial enterprises. Both He Xiaopeng, CEO of XPeng, and Li Bin, CEO of NIO, have publicly acknowledged substantial cost pressures, particularly stemming from key raw materials like memory chips and lithium carbonate.