Chinese EV makers raise prices as costs rise

Xiaomi, Chery, and FAW Bestune have raised prices on some EV models in China as battery materials and memory chip costs climb, but analysts warned weak demand could push prices down again.

Xiaomi set its new SU7 standard version at 219,900 yuan (US$30,540), up 4,000 yuan (US$555), while Chery’s Exeed said its ET5 will rise 5,000 yuan (US$695) from March 21. A previously free driver assist package will cost 5,000 yuan (US$695) more, bringing the total increase to 10,000 yuan (US$1,390).

FAW Bestune also lifted prices by 2,000 yuan (US$280) to 5,000 yuan (US$695) on mid- to high-version trims of its 2026 Yueyi 03.

Battery grade lithium carbonate rose about 127% since July 2025 to around 170,000 yuan (US$23,610) per tonne, while Counterpoint Research said memory chips were up as much as 90% in Q1 vs. Q4 amid AI demand.

Unsold EV inventory reached 680,000 units in February, and retail EV sales in the first two months fell nearly 26% year on year to 1.06 million, while UBS forecast 8% growth for 2026.

🔗 Source: South China Morning Post

🧠 Food for thought

Implications, context, and why it matters.

Price hikes follow a crackdown on a harsh price war

Small price rises come after a multi-year price war that cut average vehicle retail prices in China by about 19% over two years 1.
The fight for sales squeezed industry-wide profit margins to 4.3% in the first 11 months of 2025, which sits below the average for other industrial sectors 2.
In early 2026, China’s market regulator issued guidelines that ban automakers and dealers from selling vehicles below cost for anti-competitive reasons, with limited exceptions such as legally sanctioned clearance of overstocked goods 2.
High unsold EV inventory plus a sharp early-year drop in retail EV sales, along with rising battery-material and memory-chip costs, gives some automakers cover to cut discounts or lift prices in line with the new policy 2.

Tighter pricing rules push more overcapacity into exports

As below-cost selling faces tighter limits, China’s overcapacity, large enough to potentially meet projected global EV demand by 2026, is shifting toward exports 3.
Exports jumped 45% in January 2026 while domestic deliveries fell 16% 4.
The export surge is adding to trade strains, bringing new tariffs from the EU plus a 100% tariff from the U.S. 5.
At home, automakers are leaning less on sticker-price cuts and more on offers like seven-year ultra-low interest financing or free advanced driver-assist software 2 1.