A number of electric vehicle (EV) manufacturers in China are upping prices due to increasing commodity costs. The price hikes are expected to hit sales numbers in the world’s largest automobiles market, reports the South China Morning Post. The sky-high prices of nickel and lithium, key materials used to make EV batteries, have forced carmakers ranging from global leader Tesla to Anhui province-based Chery Automobile to raise prices and pass on the higher costs to buyers.
“They need to raise prices to maintain their profit margins,” said David Zhang, a car industry researcher at the North China University of Technology. “But higher vehicle prices could hurt sales growth, with budget-conscious consumers shying away from expensive cars.”
Last month, Cui Dongshu, general secretary of the China Passenger Car Association, said the sales of new-energy vehicles—pure electric, plug-in hybrid and fuel-cell cars—in China would jump 84% to 5.5 million units this year. Zhang, however, was less optimistic and forecast sales of 4.4 million such cars, a much lower increase of 47% over last year.