China’s Nio has flagged potential cost pressures in 2026 driven by sharp increases in global memory chip prices, with its chief executive warning that semiconductors, rather than raw materials, now represent the biggest risk to cost stability.
William Li, founder, chairman and CEO of Nio, said memory chips used across vehicle systems have seen unusually steep price rises, creating mounting pressure for automakers. He made the comments during a media briefing following the company’s ceremony marking the production of its one-millionth vehicle.
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“Potential cost pressures this year are quite significant. The biggest cost pressure isn’t raw materials, but memory chips,” Li said, adding that price increases for those components have been “crazy.”
Li said memory chips are embedded across multiple systems in Nio vehicles, including its in-house Shenji chips, Nvidia processors and cockpit computing platforms, making the company broadly exposed to supply and pricing volatility.
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“For memory chips, we need to compete for resources with AI players and computing centers,” he said, noting that competition from data centres and artificial intelligence applications is intensifying demand for advanced memory products.
Industry analysts have warned that memory prices are likely to remain elevated. Market research firm TrendForce said in an October report that strong demand for data-centre servers is expected to push DDR5 memory contract prices higher through 2026, with the sharpest increases forecast in the first half of the year.
The tightening supply has already prompted large consumer electronics companies to secure long-term arrangements. South Korea’s Korea Economic Daily reported this week that Apple executives had travelled to South Korea to negotiate chip supply agreements with Samsung Electronics and SK Hynix.
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Li said rising memory and raw material costs pose a broader challenge for the automotive sector, but added that Nio does not currently plan to pass the increases on to consumers.
“This remains within our manageable range for now, though we’ll also monitor the broader industry landscape,” he said, noting that Nio’s current gross margin provides some buffer against near-term cost shocks.
Source: CnEVPost