Three Chinese electric vehicle (EV) makers have raised prices for some models in response to rising supply chain costs, but analysts say the increases are unlikely to be sustained given weakening domestic demand. Xiaomi became the latest manufacturer to adjust pricing on March 19, announcing that its new-generation SU7 standard version would start at 219,900 yuan (US$31,800) – a 4,000 yuan increase over the previous model. Founder and CEO Lei Jun had attributed the rise to aggressive surges in supply chain component prices. The trend began earlier this month. On March 10, Chery’s Exeed brand said the high-end ET5 would see a 5,000 yuan price increase from March 21. A smart driving package previously offered for free would now cost an extra 5,000 yuan, bringing the total increase to 10,000 yuan. On March 8, FAW Bestune launched the 2026 Bestune Yueyi 03 with price increases ranging from 2,000 yuan to 5,000 yuan for mid-to-high versions. Although the three brands are not sold on a large scale, the price increases mark a sharp departure from the aggressive cuts seen in 2025, which hurt profitability for carmakers and suppliers and drew regulatory scrutiny. “The rising costs of some raw materials like lithium carbonate and the surging prices of dynamic random access memory are forcing EV manufacturers to lift selling prices,” said Yale Zhang, managing director at the consultancy Automotive Foresight in Shanghai. “More brands may follow suit, though the retail prices are still subject to actual demand.” Lithium and memory chips are emerging as new cost drivers. Battery-grade lithium carbonate prices surged nearly 127 per cent from 75,000 yuan per tonne in July 2025 to around 170,000 yuan in March 2026. Counterpoint Research said memory chips had soared by up to 90 per cent in the first quarter of 2026 from the fourth quarter of 2025 amid the boom in artificial intelligence, squeezing supply for automotive chips. HSBC Global Investment Research wrote in a January note that price rises in metals such as copper and aluminium could add up to 5,000 yuan in cost per vehicle, and memory price increases could add an extra 1,000 yuan to 3,000 yuan. Nio chairman William Li Bin said memory chips were the primary cause of cost pressure for 2026, adding that the EV industry was struggling to compete for capacity against AI data centres. Meng Qingpeng, vice-president of supply chain at Li Auto, warned that the supply fulfilment rate for automotive memory chips could fall below 50 per cent this year. Major players are taking various measures to navigate the rising costs. Geely Auto – China’s second-largest EV maker – said on March 18 it was building strategic partnerships and securing pricing agreements with suppliers to maintain competitiveness. “Once market demand is insufficient and competition intensifies, prices are difficult to maintain and are likely to turn downward,” Automotive Foresight’s Zhang said. Signs of a cooling consumer market have emerged from rising inventory. Unsold EVs climbed to 680,000 units as of February, an increase of 20,000 since December, said Cui Dongshu, secretary general of the China Passenger Car Association, in a note on March 21. Cui said the EV market was facing lower-than-expected retail sales, adding pressure on inventory. After several years of rapid growth, EV sales had a slow start this year. In the first two months of the year, only 1.06 million units were sold to retail consumers, down nearly 26 per cent from a year earlier. UBS forecast that EV sales would increase by just 8 per cent this year, a sharp deceleration from the more than 28 per cent jump in 2025.