Multiple NEV Makers Raise Prices Amid Rising Raw Material Costs

Affected by sustained increases in the prices of key upstream raw materials, several new energy vehicle (NEV) manufacturers have recently adjusted their retail prices or reduced purchase incentives. Brands including BYD, Changan, and Xiaomi have raised prices on certain models, while Tesla has increased the price of its Model Y Long Range variant by RMB 18,000 and the Performance variant by RMB 20,000. NIO and XPeng have also indicated plans to raise prices on their core models in the second quarter. Power batteries account for 30% to 50% of the manufacturing cost of NEVs. The price of battery-grade lithium carbonate—a key raw material—has surged from RMB 75,000 per ton in July last year to nearly RMB 200,000 per ton recently, significantly driving up overall vehicle production costs. Currently, most automakers’ price hikes remain in an exploratory phase as they gauge market response, and actual implementation faces challenges. Premium brands, with gross margins typically exceeding 20%, are better positioned to absorb rising costs. In contrast, automakers targeting the mid-to-low-end segment face dual pressures of intensifying competition and weak consumer demand, making substantial price increases risky due to potential customer attrition.