On June 5, 2026, China Business News, a Chinese media outlet, recently reported that China's new energy vehicle market is facing a structural price hike phase due to the soaring prices of semiconductors and battery raw materials associated with artificial intelligence (AI) demand. The article introduced that the automobile industry in 2026 is facing an unexpected price hike phase due to soaring raw material prices, and nearly 20 manufacturers have already announced price increases, with some models rising by 20,000 yuan (approximately 470,000 yen). It then pointed out that the biggest factor for the price increases is the sharp rise in prices of in-vehicle memory semiconductors due to the demand explosion in the overheated AI sector. Data released by market research firm TrendForce shows that the contract price of global general-purpose DRAM in January-March increased by 90-95% compared to the previous three months, and according to a report by Swiss investment bank UBS, the price of automotive DRAM increased by approximately 2.8 times. It also introduced that smart electric vehicles (EVs) where Level 2 driving assistance functions and smart cockpits are prevalent require 3,000 to 5,000 semiconductors, which is 10 times that of gasoline cars. The more advanced the luxury models equipped with advanced driving assistance options, the greater the capacity and quantity of semiconductors required, explaining that rising semiconductor prices are more likely to directly lead to product price increases. Furthermore, it also mentioned that the price of lithium carbonate, a critical battery material, surged due to tight supply and demand, reaching 200,500 yuan (approximately 4.7 million yen) per ton as of May 13. Mo Ke, chief analyst at RealLi Research, a lithium battery industry research firm, explained that "while battery demand is robust and production volume remains high, the temporary halt in production at lithium mines in China, a major producing region, due to the renewal of mining permits, is exacerbating the supply shortage," and conveyed that he pointed out that it will still take time to stabilize battery supply. The article introduced that Cui Dongshu, Secretary-General of the China Passenger Car Association, analyzed that "it is difficult for manufacturers in the mid-to-low price range, which lack strength amid fierce competition, to implement significant price increases," and mentioned the possibility of market polarization where "high-end models will see price increases, while mid-to-low-end models will be forced to keep their prices unchanged." Finally, a representative from McKinsey & Company conveyed the view that price increases due to external pressures could potentially shift the industry from price competition to a healthy direction of competing on technology and value. (Edited and translated by Kawashiri)