Trending Now! Xiaomi and BYD consecutively adjust prices, initiating a low-key "price increase" probe

On May 14th, the topic of “Xiaomi and BYD sequentially adjusting prices” trended on Baidu’s hot searches.

The long-standing “price war” in the new energy vehicle market has subsided. Recently, following BYD, several new energy car companies have signaled price adjustments, either directly raising the prices of some models or gradually reducing terminal purchase discounts, quietly testing the “price increase.”

“Currently, the prices of our main models in the store haven’t changed, but the 10k yuan terminal 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 store said that recent price increases only apply to some special optional versions of models, while the base models’ prices remain stable.

Unlike the previous intense “price war,” this round of price adjustments by automakers appears particularly cautious, mainly involving small-scale and partial model adjustments, with no large-scale, category-wide price hikes.

According to incomplete statistics, more than 10 new energy vehicle companies have recently announced price adjustments, reduced discounts, or plans to raise prices in the second quarter. BYD increased the price of its intelligent driving optional packages for some models by over 2,000 yuan; Changan Qiyuan’s intelligent laser version increased by 3,000 yuan; Xiaomi’s new generation SU7 all models increased by 4,000 yuan; NIO and Xpeng have announced plans to raise model prices in the second quarter. Brands like Tesla, Zeekr, and Aeva have tightened their interest-free financing policies, increasing hidden costs for buyers.

Multiple brands are testing price increases, with the core reason pointing directly to the rising costs of the supply chain. After years of fierce “price wars,” profit margins for new energy vehicle companies have been significantly compressed. In January and February 2026, the profit margin in the automotive industry was only 2.9%, far below the manufacturing industry’s average. Cost pressures that could have been absorbed through internal cost reductions are ultimately passed on to the end market due to the overall increase in supply chain costs.

As the core component of new energy vehicles, power batteries account for 30% to 50% of the vehicle’s cost, and fluctuations in raw material prices directly impact overall manufacturing costs. Data shows that the spot price of battery-grade lithium carbonate has risen from 75k yuan per ton in July last year to nearly 200k yuan per ton recently, becoming the primary cost pressure for automakers.

Meanwhile, under the wave of global intelligent transformation, prices of smart components such as automotive-grade chips and storage devices have surged significantly. Automotive-grade DDR4 memory (the fourth-generation double data rate synchronous dynamic random-access memory) has increased by over 150%, while high-end DDR5 memory (the fifth-generation double data rate synchronous dynamic random-access memory) has seen spot price increases exceeding 300%. According to UBS estimates, the rising cost of storage chips has increased the cost per vehicle of intelligent driving models by 3,000 to 7,000 yuan. Additionally, prices of raw materials like crude oil, rubber, and aluminum have risen, compounded by increases in global logistics costs and geopolitical factors, pushing up the entire automotive supply chain costs.

On one side, the continuous rise in supply chain costs creates profit pressure; on the other, the passenger car market has experienced negative growth this year, placing the new energy vehicle industry in a dilemma of price hikes versus volume retention.

Cui Dongshu, Secretary-General of the Passenger Car Market Information Joint Conference, analyzed that it is currently very difficult for the entire new energy vehicle market to implement widespread price increases. From a market structure perspective, high-end new energy vehicle companies generally maintain gross profit margins above 20%, with relatively strong cost absorption capacity; mid- and low-end manufacturers face intensified market competition and shrinking consumer demand. Large-scale price increases could easily lead to customer loss, making full-price hikes highly unlikely. Meanwhile, many new models are entering the market with low-price strategies, further compressing the space for existing models to adjust prices. Most automakers’ price hikes remain at the level of public opinion, with practical implementation facing many difficulties.

However, in recent years, the domestic automotive industry has fallen into an internal competition of “price for volume,” with profits continually squeezed, and R&D investment, technological innovation, and quality upgrades constrained, which is not conducive to 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 step toward gradually ending the price competition within the industry, moving toward high-quality value competition.

Editor | Cheng Peng, Du Bo

Proofreader | Chen Kemin

(Edited by: Wen Jing)

Keywords:
BYD
Xiaomi
Automobile