KATHMANDU: Rising costs in the AI and automotive sectors are driving electric vehicle prices higher worldwide. Automakers face dual pressures: surging demand for memory chips from the AI industry and rising lithium prices causing battery supply shortages.
Since mid-2025, prices for DDR5 memory used in automotive-grade DRAM have increased 300 percent, according to TrendForce. Lithium carbonate prices have jumped from $10,900 to $24,600 per ton, while copper, aluminum, and other metals have also risen sharply.
Global supply chain disruptions, combined with growing EV production, have intensified the supply-demand imbalance.
Industry executives describe the current situation as a “resource war” between the automotive and AI sectors. AI-focused HBM memory offers chip manufacturers profit margins of up to 65 percent, several times higher than automotive-grade memory.
As a result, car chips are often deprioritized, adding $150-450 per vehicle, enough to erase the profit margin on many mainstream and entry-level premium EV models.
Industry experts advised that consumers looking to buy a car should do so as soon as possible, citing rising material costs, changing supply patterns, and competition with the AI industry for key resources.
UBS has warned that chip shortages could disrupt global automotive production as early as Q2 2026, with EV makers most affected due to their reliance on advanced semiconductors.
