Gasgoo Munich- VOYAH Chairman Lu Fang offered his take on auto pricing trends at the World Economic Forum's Annual Meeting of the New Champions on June 24. With the cost of steel, aluminum, batteries, and petrochemicals climbing across the board, maintaining current price levels is already a struggle — making further price cuts illogical for the industry.
Image source: VOYAH
Vehicles are long-life products, Lu Fang argued, meaning their price tag must cover not just the purchase but the value of after-sales service. Prolonged negative gross margins are unsustainable — and ultimately unfair to consumers. While automakers are under immense pressure to absorb rising costs through efficiency gains and better cost management, completely offsetting them simply isn't realistic.
Lu Fang predicts that price hikes are now highly probable. High-end models, with their wider profit margins, still have some buffer. Low-end vehicles, however, are far more sensitive to cost fluctuations and will likely bear the brunt — with some models even risking production cuts or market exit. His advice to consumers is straightforward: if you plan to buy, do it sooner rather than later.
Lu Fang has previously addressed pricing on his personal Weibo account. He noted that the penetration rate of new-energy passenger vehicles topped 60% in April for the first time, while more than 15 NEV makers announced price increases. Taken together, these figures reinforce his view that 2026 will be the decisive year for new-energy vehicles versus internal combustion engines — a sign that the substitution process is accelerating. At the same time, cost pressure from rising upstream raw materials will inevitably trickle down from the supply chain to the consumer, a natural outcome of the industry's cycle.
The recent wave of price hikes signals a shift in the competitive landscape, according to Lu Fang. The focus is moving away from “who can offer the lowest price” toward “who has the stronger supply chain resilience and more robust system capabilities.”
In his view, the real test for automakers today isn't whether to raise prices, but whether they can build genuine competitiveness through system capability and innovation. For the industry as a whole, adjusting prices is no longer just a marketing tactic — it is a necessary choice dictated by the limits of systemic capacity.
