Electric car prices may rise on chip and material costs just as leased Teslas flood dealer lots

The exorbitant memory and processing chip prices, as well as the rising tags of lithium carbonate and metals needed to build their batteries and bodies, will increase the manufacturing tag of new electric cars drastically.

According to NIO's chairman, electric cars now cost $1,400 more to build as AI data centers scoop all the memory and processing chips, sending their price skyward, while the energy and metal markets' geopolitical disruption is raising material costs, too.

New EV prices may rise on chip crunch

This adds to the unrelenting pace of battery-grade lithium carbonate price jumps that have been going on for the past few months. While copper and aluminum are getting more expensive by the day because of the geopolitical tensions, half of the increase in EV manufacturing costs now comes from the doubling of memory and other chip prices in the last couple of months.

This may be good news for Samsung and other memory makers, but for electric car companies like Tesla, the rising cost of batteries, chips, and body materials might force their hand in raising the prices of their vehicles.

Used electric car prices drop as availability increases

In the US, the manufacturing cost inflation would come just as hundreds of thousands of Tesla leases are expiring and the market gets flooded with cheaper electric cars. There are 300,000 EVs that will be getting out of their three-year leases and onto dealers' lots in 2026 alone. At the same time, the average price of a new vehicle in the US has surpassed $55,000 for the first time, while the 3-year depreciation rate of a Tesla Model Y, for instance, is 47% as of mid-2025.

Given the drastic drop in the resale value of electric vehicles compared to their gas-powered alternatives, buyers may very well opt for a second-hand EV in the $20,000-$30,000 range now that gas prices are rising, rather than splurge on a new one or on a used ICE vehicle like a RAV4, whose resale value has barely budged in the same time.

Battery technology is getting increasingly reliable when it comes to longevity, too, and Tesla is now even giving a 10-year Model Y battery warranty for an extra fee, so used electric cars have become a viable proposition. Together with rising factory costs, however, a livelier second-hand market could put pressure on new Tesla car sales, especially if the manufacturer is faced with the dilemma of whether to raise their prices or eat the cost increase.

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