Chinese media Phoenix Finance reported on the 7th on the price trends of new energy vehicles such as electric vehicles (EVs) and internal combustion engine vehicles, with the title "Electric Vehicles (EVs) See Price Increases, a Sudden 'Tsundere'".

According to the article, in China, over the past two years, the idea that "if you tighten your purse strings and wait, new energy vehicle prices will fall further" had spread among consumers considering purchasing a car. However, as the second quarter of 2026 began, that trend reversed, and the current price adjustments, which started in March, rapidly expanded from late April to early May.

Harmony Intelligent Mobility Alliance (鸿蒙智行) in early March, citing the inclusion of next-generation LiDAR, raised the manufacturer's suggested retail price (MSRP) of the new AITO M9 model by 10,000 yuan (approximately 240,000 yen), and also revised prices for some parts of the Zunjie S800.

Xiaomi (小米) announced the new SU7 a few days later, implementing a 4,000 yuan (approximately 94,000 yen) increase across all models. Chairman and CEO Lei Jun (雷軍) explained, "Material costs alone have risen by approximately 20,000 yuan (approximately 470,000 yen). The decision to ultimately limit the increase to 4,000 yuan was made after careful consideration."

Furthermore, by the end of April, there was also movement from BYD (比亜迪), with the company taking measures to raise the price of automatic driving assistance option packages for popular models while keeping the vehicle's base price unchanged.

The wave of price increases continued to spread thereafter, and the methods can be divided into three categories: "revising manufacturer's suggested retail prices," "revising prices for automatic driving assistance packages," and "reducing purchase benefits."

Furthermore, the answer to why the price competition for new energy vehicles, which had lasted for about three years, suddenly "reversed" can be found in two areas of the supply chain. One is the rise in semiconductor memory prices. The other is the rise in the price of lithium carbonate, a key raw material for drive batteries, which accounts for 30-50% of vehicle costs.

Furthermore, "vehicle weight increase" can be cited as a factor attributable to the automakers themselves.

According to data from China's Ministry of Industry and Information Technology, the average weight of Chinese-made passenger vehicles has continued to rise over the past decade or so, and this trend is particularly pronounced in the new energy vehicle sector. Heavier cars require more powerful batteries, and higher performance is also demanded from the chassis, suspension, brakes, and tires, thus increasing costs.

The profit margin of China's entire automotive industry was 2.9% in January-February 26 and 3.2% in the first quarter, significantly lower than the long-term average of 6% for the manufacturing industry. It is said that new energy vehicle manufacturers, under these circumstances, have no choice but to restore profits through price increases.

On the other hand, the movement of internal combustion engine vehicles such as gasoline cars is in contrast to that of new energy vehicles. The article argues that "if the price increases for new energy vehicles are a survival strategy, then internal combustion engine vehicles are currently 'trying to maintain their last vestiges of dignity'," and conveys that companies are trying to increase sales volume through price reductions.

According to a Chinese industry association, the average price reduction for new internal combustion engine vehicles in January-April 26 was 34,000 yuan (approximately 800,000 yen). Furthermore, regarding the background of these price reductions, it is pointed out that the rise in crude oil prices due to the escalating tensions in the Middle East was the main reason for the sharp decline in demand for internal combustion engine vehicles.

The article also referred to a more serious problem, stating that "the appeal of internal combustion engine vehicles is diminishing," and reported that "while Chinese-made new energy vehicles come standard with highway NOA (autonomous driving assistance) even in the early 100,000 yuan (approximately 2.4 million yen) range, joint-venture internal combustion engine vehicles in the same price range are still competing over 'which display is larger'."

In addition, it also argued that "for new energy vehicle manufacturers, price increases are a big gamble. This assumes the existence of strong consumer demand for smart features," and indicated that competition in the Chinese automotive market in 26 will by no means be peaceful. (Translation/Editing: Noya)