(Yicai) May 21 -- Chinese and foreign auto giants, including BYD, Volkswagen Group, and Tesla, have raised the price of multiple new energy vehicle models or tightened purchase subsidies in China since the start of this month amid a wave of centralized price adjustments in the market due to continuously growing upstream supply chain costs.

Six models from BYD, several models from the Volkswagen ID series, three models from Nio, Tesla's Model Y, Changan Automobile's Qiyuan Q07, GAC Aion's Aion Y Younger and Aion S Plus, and Toyota Motor's bZ4X increased in price this month, according to incomplete data compiled by Yicai.

The price adjustment strategies varied between companies, with some directly raising the selling price and others adjusting discounts or raising optional package costs.

For example, Nio increased various models' starting prices by CNY5,000 to CNY10,000 (USD735 to USD1,470) on May 10, while also adjusting or even cutting some of its free battery swap benefits. Tesla tightened its interest-free financing plan for the Model Y in China on May 1, indirectly increasing the cost of buying the car, with the carmaker also hiking the model's price by USD1,000 in the United States.

It is quite difficult for the NEV market to implement across-the-board price hikes, said Cui Dongshu, secretary-general of the China Passenger Car Association. From the perspective of the market landscape, the gross profit margins of high-end NEV makers are generally above 20 percent, giving them a relatively stronger capacity to withstand cost pressures, Cui noted.

However, mid-to-low-end automakers face the dual pressures of intensifying market competition and shrinking consumer demand, Cui stressed, adding that they are highly likely to lose customers if they significantly increase prices, making an across-the-board price hike extremely unlikely.

The main reason for the centralized price jumps stems from the continuous rise in upstream supply chain costs. The prices of various core auto raw materials and automotive-grade chips have continued to increase, coupled with a simultaneous rise in battery raw material prices, which directly pushes up production and manufacturing costs.

The spot price of automotive-grade DRAM has surged by 180 percent over the past three months, causing the per-vehicle cost for this component to skyrocket from around CNY700 to about CNY2,000 (USD103 to USD294). Lithium prices have more than doubled in the same period, with those of copper and aluminum also increasing. The increase in metal raw material prices alone has added about CNY5,600 to the per-unit cost of a pure electric vehicle.

In January, UBS predicted that the manufacturing cost of a typical mid-sized smart EV would surge by CNY4,000 to CNY7,000 in the short term.

Editor: Martin Kadiev