Oil prices are soaring. Is the wave of price hikes for electric vehicles coming too?

Recently, looking at the developments in the Chinese automotive market, I suddenly felt a complex mix of emotions.

The catalyst is definitely the "explosive" financial report released by CATL. In 2025, it achieved an operating income of 423.7 billion yuan, a year - on - year increase of 17%; the net profit attributable to shareholders of the listed company was 72.2 billion yuan, a year - on - year increase of 42%. One has to admit that such money - making ability is terrifying.

Especially when most automakers are deeply stuck in the quagmire of price wars, and many brands can hardly ensure self - sufficiency in profitability. However, "King Ning" (CATL), the absolute oligarch in the power battery industry, is living a more and more prosperous life and making huge profits. The contrast is really striking.

Of course, it also further proves from the side who really holds the dominant power in the current new energy sector in China. In the era of traditional fuel vehicles, automakers were always the masters of the game rules and at the top of the ecological chain. However, in the era of smart electric vehicles, suppliers led by CATL and Huawei are the real big bosses behind the scenes.

The situation is just so ruthless.

The fundamental purpose of revealing the above cruel facts at the beginning of this article is to better introduce the following content. I thought that the sharp rise in global oil prices caused by the conflict between the United States and Iran would benefit the new energy sector and even break the sales slump in the first two months of this year caused by policy fluctuations.

However, the story doesn't seem to be developing in the expected direction. Because, a wave of price increases for electric vehicles may be coming. Yes, you read it right. This time it's a "price - increase wave".

Actually, as early as March 5th, EXEED, a brand under Chery, announced that it would raise the official guide price of the EXEED ET5. Among them, the price of the high - end 210 LiDAR Premium Edition was increased by 5,000 yuan. After the adjustment, the official guide price of this version is 164,900 yuan.

This week, there are further relevant reports. The refreshed ZEEKR 007 GT, which is expected to be launched in the second quarter, is likely to have a price adjustment on the basis of the current model, with an increase ranging from 5,000 yuan to 8,000 yuan.

As for the explanations given by the two automakers, both are due to the significant increase in the prices of upstream raw materials and core components. Therefore, I'd like to take this opportunity to discuss how exaggerated this surge is.

Firstly, it's the storage chips.

After in - depth analysis of the fluctuations since last year, the main problem lies in the structural imbalance of global production capacity.

With the booming development of the AI field, several global giants in the storage chip industry have shifted more than 80% of their advanced - process production capacity to HBM high - bandwidth memory and high - end DDR5 products required by AI servers in pursuit of higher profits, significantly reducing the production capacity of conventional automotive - grade DDR4 and other storage chips.

The procurement share and bargaining power of automakers are far inferior to those of technology giants. Facing the production capacity tilt and price - increase strategies of chip manufacturers, they have no ability to resist and can only swallow their pride.

So, how exaggerated is the increase?

Data shows that in recent months, the cumulative increase in DDR4 memory has exceeded 150%, and the high - end DDR5 has skyrocketed by 300%. Just the increase in storage chips alone can increase the cost of a single electric vehicle by 1,000 yuan to 3,000 yuan. For brands with already thin profit margins, the impact is far greater than expected.

To make matters worse, there is no sign of alleviation in the current situation of structural imbalance in production capacity. From the perspective of chip manufacturers, they will definitely continue to chase the lucrative trends.

This means that in the short term, automakers can only continue to bear the pressure silently.

In the long run, they must accelerate the process of domestic substitution of chips and increase their self - research efforts. Otherwise, they will always be led by the nose in this regard. "When others put pressure on you, you'll be in a mess."

In addition, another factor behind the wave of price increases for electric vehicles is related to lithium carbonate.

As is well - known, it is a common consensus in the industry that power batteries account for 30% - 50% of the total vehicle cost. It can be said that they are almost the "lifeblood", which also explains why there is a saying: "Except for BYD, the entire automotive industry is working for CATL."

Recently, the price of battery - grade lithium carbonate has soared from about 75,000 yuan per ton at the beginning of last year to 171,900 yuan per ton in March this year. Currently, although it has dropped to 155,000 yuan per ton, it has almost doubled compared to before July 2025.

Taking lithium iron phosphate batteries as an example, the costs of battery cells and packs have increased by 21% and 14% respectively compared with the fourth quarter of last year. It is estimated that the average battery cost per vehicle will increase by about 3,434 yuan.

Combined with the increase in storage chips, a comprehensive calculation shows that the inflation rate of a mainstream mid - sized electric vehicle this year will be as high as 4,000 yuan to 7,000 yuan. More seriously, the industry's profit margin may face a compression risk of 5% - 8%.

In the past, in a relatively healthy market, when faced with a sharp increase in the prices of raw materials and components, the most common practice in the industry was for automakers to adjust product prices reasonably to hedge against the operating pressure caused by the increase in manufacturing costs.

However, due to the increasingly fierce competition in the terminal market, automakers are becoming hesitant. Although EXEED and ZEEKR mentioned at the beginning took the lead, most players still choose to stay put for now.

For the leading players, they can relieve the pressure through economies of scale and cost reduction in the supply chain. For the followers with weak risk - resistance capabilities, the impact of this "price - increase wave" may be devastating. The sharp increase in chip and battery costs is enough to completely swallow up their remaining meager profits.

Recently, Cui Dongshu, the secretary - general of the China Passenger Car Association, also shared a set of data: Last year, the sales profit margin of the automotive industry continued to decline to 4.1%, hitting a record low. In December, which was supposed to have a tail - end effect, the profit margin dropped to a freezing point of 1.8%, a month - on - month decrease of 2.6% and a year - on - year decrease of 2.3%.

There is no doubt that this is a dangerous signal. If the situation still cannot improve this year, many automakers will surely be dragged into the abyss of "chronic blood loss".

Of course, the possible "price - increase wave" of electric vehicles also indirectly proves that the competitive model relying solely on price wars and marketing wars is no longer sustainable. In the future, the competition among automakers will be upgraded to a competition in supply - chain resilience, self - research capabilities in technology, and industrial - chain integration capabilities.

This requires everyone to keep up with the pace of improvement and transformation. Choosing to continue to slack off will probably make them suffer greatly from the fluctuations in the supply chain. After all, the truth remains that in the new track, most automakers no longer have the right to speak.

From the perspective of consumers, if the "price - increase wave" of electric vehicles hits on a large scale, it is definitely not a good thing. It will probably give rise to a group of "wait - and - see people". However, the current market situation is so contradictory. If prices don't increase, automakers can't survive; if prices increase, consumers won't buy.

Making cars is really not a good business. By the way, I remembered the financial report of CATL again...

This article is from the WeChat official account "Automotive Commune" (ID: iAUTO2010), written by Cui Liwen, and is published by 36Kr with authorization.