Xiaomi Auto leads Chinese electric vehicles into the price war red ocean.

1. **New energy vehicle price war**: The new energy vehicle market has kicked off this year with an intense price war, with automakers like BYD slashing prices, making competition extremely fierce.

2. **Importance of battery costs**: Batteries are the most expensive component in new energy vehicles, accounting for 40-60% of the total vehicle cost, while battery cells make up 70-80% of the battery pack cost.

3. **Lithium carbonate price fluctuations**: Lithium carbonate, a key raw material for battery production, directly impacts battery costs with its price volatility. Over the past few years, lithium carbonate prices surged from 50,000 yuan/ton to 600,000 yuan/ton before plummeting to below 100,000 yuan.

4. **Battery overcapacity**: With the rapid development of the new energy vehicle market, battery production capacity has expanded quickly, leading to oversupply and a subsequent drop in battery prices.

5. **Cost reduction through technology**: To cut costs, automakers and battery manufacturers are adopting technological innovations and material substitutions, such as using aluminum wires instead of copper wires and domestic alternatives, to reduce battery production costs.

6. **Supply chain management**: Automakers are increasing supplier numbers and frequent tendering to ramp up competitive pressure, forcing suppliers to lower quotes and thereby reducing overall vehicle costs.

7. **Trend of in-house battery R&D**: Some automakers have begun developing batteries and cells in-house to better control costs and improve supply chain transparency.

8. **Downward trend in battery prices**: Industry insiders widely believe that power battery prices still have room to fall, with further cost reductions expected in the future.

9. **Price reversal in new energy vehicles**: Due to the development of China's battery industry, new energy vehicle prices in China have shown a reversal trend compared to international markets, allowing Chinese consumers to purchase these vehicles at lower prices.

10. **Consumer benefits**: As battery costs decline and new energy vehicle prices drop, consumers can buy higher-performance vehicles at more affordable prices, enjoying better cost-performance products.