As copper prices continue to climb and multiple brands signal price increases for air conditioning products, Gree announced on January 5th that it is actively responding to the 2026 national home appliance subsidy policy by genuinely benefiting consumers and pledging not to raise prices for its household air conditioners.
The leading manufacturer's clear stance has poured cold water on the simmering wave of price hikes within the air conditioning industry.
On January 5th, Zhu Lei, CMO of Gree Electric Appliances, provided detailed reasoning behind the decision to hold prices steady. He stated the core objective is to deliver real benefits to consumers. "While rising copper prices are indeed putting pressure on the industry by increasing costs, if we follow the trend and raise prices, it would ultimately dilute the benefits of the subsidy," he explained. Furthermore, Gree explicitly stated it currently has no plans to adopt "aluminum replacing copper," citing a commitment to consumer responsibility and upholding its promise of a "ten-year free repair" policy.
Data obtained shows that on January 5th, the spot price of electrolytic copper once again surpassed 100,000 yuan per ton, with an average price of 100,615 yuan/ton, continuing its upward trend and increasing by 1,295 yuan/ton compared to the last day of 2025.
The question arises: after Gree's announcement, can other air conditioner brands still proceed with price increases?
This round of air conditioner price hikes began as early as December of last year.
It was learned that in early December, MBO Air Conditioning's domestic marketing center issued a "Notice on MBO Air Conditioning Price Adjustments for December" to its distributors. Citing persistently high prices of bulk raw materials, particularly copper, which have pushed material costs beyond what companies can absorb internally, leading to continuously rising overall unit costs, the notice stated that to effectively alleviate cost pressures and protect distributors' profit margins, wholesale prices for MBO air conditioners would increase by 5% from the November baseline starting December 16, 2025, with specific product price details to be provided separately by regional managers.
It wasn't just MBO; brands like Midea, Chigo, and Fujitsu subsequently also reported news of impending price increases.
On January 5th, a relevant person from the MBO Group confirmed the aforementioned price adjustment. It is understood that MBO was the first brand in the industry to announce a price hike, aiming to guide the industry away from "internal competition," insist on delivering quality, and lead the industry towards price levels that reflect true value.
However, sources close to Midea revealed to reporters that the message about "Midea (air conditioner) product price increases" was a misinterpretation. In reality, Midea's overall product pricing structure for air conditioners has not changed; only a few specific models saw minor adjustments due to the new year's product price gradient layout.
Amid this industry-wide chatter about increases, Gree took the lead on January 5th by issuing a declaration against raising prices. According to a "Statement on Recent Market Concerns" released by "Gree Communications," "Gree actively responds to the 2026 national home appliance subsidy policy to genuinely benefit consumers. We pledge that Gree household air conditioners will not see price increases."
Zhu Lei further elaborated in an interview, stating that the core reason for Gree's counter-trend pledge is to ensure consumers truly benefit, which aligns with Gree's founding principle. He provided an example: a 3,000-yuan, Grade 1 energy efficiency air conditioner receives a 15% national subsidy, amounting to a 450-yuan discount, meaning the consumer originally pays only 2,550 yuan. However, if the price is first raised by 6% to 3,180 yuan, the national subsidy increases to 477 yuan, but the consumer's actual out-of-pocket cost also rises to 2,703 yuan. This effectively means both the state and the consumer end up sharing the burden of the increased raw material costs.
"By maintaining stable prices during the subsidy period, we fully support the national policy and stimulate consumption. Gree has over thirty years of technical expertise and supply chain management capabilities, allowing us to absorb some cost pressures through lean production and technological optimization. Not raising prices isn't about selling at a loss for publicity; it's about ensuring the benefits intended for consumers are actually realized. This is our responsibility to consumers," Zhu Lei said.
Behind this wave of price hike discussions lies the fact that the average selling price of domestic air conditioners, both online and offline, had been declining throughout 2025. Data shows that in the first eleven months of last year, the offline market average price for air conditioners was 4,203 yuan per unit, down 4.01% year-on-year. In the online market, the average price was 2,680 yuan per unit, also down 1.24% year-on-year.
Zhang Yanbin, a veteran home appliance industry observer, calculated on the evening of January 5th that for mainstream brands, the material cost of a standard 1.5-horsepower air conditioner is roughly 1,000 to 1,200 yuan, with copper accounting for 200 to 400 yuan of that cost. Based on a rough estimate of a 30% increase in copper prices, the copper cost has risen by 60 to 100 yuan. This increase represents about 6% of the total air conditioner cost, which is largely in sync with the price hike percentages announced by mainstream brands. "The announced price increases by branded air conditioners are relatively moderate and also serve to test the market's acceptance of higher prices," Zhang noted.
Regarding Gree's public commitment not to raise prices, Zhang Yanbin commented that on one hand, it is a move for the brand to continuously enhance its value proposition, as holding prices steady is consumer-friendly behavior. On the other hand, given that today's consumers are price-sensitive, if competitors raise prices while Gree does not, Gree could capture more market share and boost sales volume.
"Of course, as a leading brand in the industry with significant market influence, Gree's decision not to raise prices will likely prevent other brands from implementing large increases," Zhang Yanbin said. After all, the air conditioner market has entered a stage of competition for market share within existing demand. Whether price hikes can be sustained ultimately depends on market acceptance. Some companies' announcements of increases might just be posturing, testing the waters before taking real action.
Based on information obtained, Midea is also not raising prices across its entire product line. If the two industry giants maintain their pricing strategies, the room for other brands to raise prices is indeed limited.
However, the aforementioned MBO Group representative also mentioned that different companies' pricing strategies are based on their own respective strengths and capabilities, leading to different considerations.
The latest data shows that on January 5, 2026, the spot price of electrolytic copper once again broke through 100,000 yuan per ton, ranging from 100,530 yuan/ton to 100,700 yuan/ton, with an average of 100,615 yuan/ton, an increase of 1,295 yuan/ton compared to December 31, 2025.
Simultaneously, the price of electrolytic aluminum ranged from 23,290 yuan/ton to 23,330 yuan/ton, averaging 23,310 yuan/ton. The price of copper is approximately 4.32 times that of aluminum (i.e., the copper-to-aluminum ratio is 4.32).
Mi Yanbin, an analyst at SCI's Fubao Metals, stated that since 2021, as copper prices climbed, the copper-to-aluminum ratio began to rise, reaching an average of 3.89 in 2025, an increase of 0.38 compared to 2015. The widening ratio suggests, on one hand, that copper's influence on aluminum will strengthen, and on the other hand, that the scope for aluminum to substitute for copper will expand.
"Aluminum replacing copper" is considered a key strategy to address issues like copper resource shortages and high costs. Mi Yanbin noted that currently, some mid- to low-end air conditioners on the market use aluminum tubes, and certain brand manufacturers sell them. These air conditioners are generally lower-priced but tend to have higher energy consumption ratios and weaker durability compared to mid-to-high-end products. From an overall market perspective, air conditioners with aluminum tubes remain a relatively niche segment.
Regarding "aluminum replacing copper," Gree has consistently and clearly stated it will "not adopt it for now." On January 5th, Gree reiterated that the company currently has no plans related to "aluminum replacing copper."
Zhu Lei further elaborated on the logic behind this stance. The heat exchanger is the core component of an air conditioner. Copper's thermal conductivity is 1.7 times that of aluminum, and it shows no corrosion after 500 hours of salt spray testing, with its corrosion resistance proven over long-term market use. "We are not opposed to technological innovation and are continuously monitoring the development of 'aluminum replacing copper' technology. However, Gree's standard is that any technology must fully meet quality requirements. Our current decision not to follow this trend is because we refuse to gamble with consumers' long-term user experience," he said.
When asked about balancing corporate profits with consumer interests, and whether the "no price hike + copper tubes" strategy affects investor confidence, Zhu Lei responded that Gree firmly believes consumer interests and long-term corporate development are unified, not opposed. For investors, Gree's strategic resolve is more trustworthy. "We avoid short-term cost shifting, instead focusing on enhancing profitability through technological upgrades and product portfolio optimization," he stated.
"The ultimate goal of industry development is to meet consumer demand. Price wars and material substitution battles are merely means to an end; they should not deviate from the fundamental principle of prioritizing quality," Zhu Lei concluded.
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