(Yicai) July 13 -- Seres Group’s shares plunged after the Chinese new energy vehicle maker said it expects to have sunk to a loss in the first half of the year, mainly because of surging prices of raw materials such as memory chips and lithium carbonate.

Seres [HKG: 9927] ended 13.6 percent lower at HKD41.32 (USD5.27) per share in Hong Kong today, after touching a 52-week low of HKD41.08 in the afternoon. The stock has fallen more than 60 percent since the end of last year.

The net loss was likely between CNY1.5 billion and CNY1.8 billion (USD221.1 million and USD265.4 million) in the six months ended June 30, compared with a net profit of CNY2.9 billion a year earlier. The company had a first-quarter profit of CNY754 million (USD111.2 million).

Carmakers face numerous challenges, the biggest of all being a five-fold increase in memory chip prices, Seres’ Chairman Zhang Xinghai said at the China Auto Chongqing Forum last month, adding that the price of lithium carbonate, a key raw material for lithium batteries, had surged 125 percent to CNY180,000 (USD26,540) per ton from CNY80,000 (USD11,800) a year ago.

As a result, the cost of manufacturing each vehicle under the Aito brand -- which Seres co-develops with Chinese technology giant Huawei Technologies -- has increased to CNY20,000 from CNY15,000, Zhang noted.

With batteries now accounting for over 40 percent of NEV production costs, the “center of gravity” of China’s NEV industry is tilting toward battery makers, spotlighting the vulnerability of those carmakers that rely entirely on third-party suppliers for their power packs, Cui Dongshu, secretary-general of the China Passenger Car Association, said at a media briefing on July 8.

Chinese automakers’ profits were squeezed in the first half. While overall revenue grew 1.4 percent between January and May from a year earlier, costs surged 2.3 percent, leading to a 20 percent drop in profits, according to Cui.

GAC Group recently said it expected a first-half loss of CNY4.1 billion to CNY4.6 billion, mainly because of the impact of pricier raw materials. Meanwhile, JAC Motors forecast its loss to have shrunk by CNY32.8 million (USD4.8 million) to about CNY740 million from a year earlier.

Editor: Futura Costaglione