Trending Now! Xiaomi and BYD Announce Price Adjustments One After Another

On May 14, the topic of “Xiaomi and BYD sequentially adjusting prices” surged to the top of Baidu’s trending search list.

For years, the “price war” in the new energy vehicle market has been put to rest. Recently, following BYD, several new energy vehicle companies have released signals of price adjustments—either directly increasing the prices of certain models, or gradually cutting back on end-customer purchase incentives—launching a low-key “price-hike” probing move.

“In-store, the prices of our main-selling models have not changed for now, but the 10,000-yuan end-of-sale cash discount may be canceled later, which will increase the cost of buying a car,” a salesperson at a NIO dealership in Beijing told reporters. A salesperson at a BYD dealership said that the recent price increases apply only to certain special optional-version models, while the pricing of base models remains stable.

Unlike the earlier and highly publicized “price war,” this round of automaker price adjustments appears especially cautious. It mainly involves small-scale, localized changes to specific models, and there has been no category-wide, large-scale price increase.

According to incomplete statistics, in the recent period more than 10 new energy vehicle companies have issued announcements to adjust prices, reduce incentives, or plan to raise prices in the second quarter. BYD raised the price of its intelligent driving optional packages for some models by more than 2,000 yuan; Changan Qiyuan’s intelligent laser version price was increased by 3,000 yuan; Xiaomi’s new-generation SU7 saw a 4,000-yuan price increase across the entire lineup; NIO and XPeng have indicated plans to raise the prices of models in the second quarter. Brands including Tesla, Zeekr, and Avatr have tightened their interest-free financing purchase policies, leading to higher hidden costs for buyers.

With multiple brands initiating tentative price increases, the core underlying driver points directly to continuously rising supply-chain costs. After years of “price war” battles, profit margins for new energy vehicle companies have been severely squeezed. In January and February 2026, the automotive industry’s profit margin was only 2.9%, far below the manufacturing industry’s average level. Cost pressures that could previously be absorbed through internal cost reductions ultimately have to be passed on to the end-market under the shock of supply-chain costs rising across the board.

As the key component of new energy vehicles, power batteries account for 30% to 50% of total vehicle cost. Fluctuations in the prices of raw materials directly affect vehicle manufacturing costs. Data shows that the spot price of battery-grade lithium carbonate has risen from 75,000 yuan per ton in July last year to approaching 200,000 yuan per ton recently, becoming the primary pressure on the cost side for automakers.

At the same time, amid the global wave of smart transformation, prices of intelligent components used in vehicles—such as automotive-grade chips and storage devices—have risen sharply. Automotive-grade DDR4 memory (i.e., the fourth-generation double data rate synchronous dynamic random-access memory) has recorded cumulative price increases of more than 150%, while high-end DDR5 memory (i.e., the fifth-generation double data rate synchronous dynamic random-access memory) has seen spot price gains exceeding 300%. According to UBS estimates, the increase in storage-chip prices raises the per-vehicle cost of intelligent-driving models by 3,000 yuan to 7,000 yuan. In addition, the prices of basic raw materials such as crude oil, rubber, and aluminum have increased. Combined with rising global logistics and transportation costs and the impact of geopolitical factors, the overall cost of the automotive supply chain has risen across the board.

On one side, there is mounting profitability pressure caused by supply-chain costs continuing to rise; on the other, the passenger-vehicle market environment has seen continuous negative growth since the beginning of this year. The new energy vehicle industry is caught in a dilemma between raising prices and maintaining sales volume.

Cui Dongshu, Secretary-General of the Passenger Car Market Information Joint Conference, analyzed that it is extremely difficult for the current new energy vehicle market to implement broad-based price increases. From the market structure perspective, high-end new energy automakers generally maintain gross margins of 20% or above and therefore have relatively strong ability to absorb cost pressure. Mid- and low-end automakers face dual pressures: intensified competition in the market and a contraction in consumer demand. Once there are large-scale price increases, companies are likely to lose customers, making the possibility of a comprehensive price increase very low. Meanwhile, many entirely new models enter the market using low-price strategies, further compressing the space for price adjustments of existing inventory models. For most automakers, price increases tend to remain at the level of public sentiment, while actual implementation faces major difficulties.

However, in the past few years, the domestic auto industry has fallen into the “competing on price to boost volume” predicament of over-involution. Corporate profits have been continuously squeezed, constraining R&D investment, technological innovation, and quality upgrades, which is unfavorable for the industry’s long-term healthy development. The China Association of Automobile Manufacturers believes that this round of price adjustments is both a passive response by new energy vehicle companies to rising costs and a move that will gradually help the industry move away from price-driven involution, toward high-quality competition based on value.

Source: Daily Economic News

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