Yesterday (November 27th), BYD sparked heated discussions in the industry by requesting a 10% price reduction from suppliers. Today, BYD's share price fell by over 6%.

This also leads to the issue of auto companies, as the "chain leaders," having increasingly slower payment cycles. Currently, most payment cycles in the automotive industry exceed six months. Some netizens claim that very few companies can make payments on time as stipulated in the contract.

Bloomberg compiled the changes in accounts payable cycles for some auto companies from 2021 to 2023. BYD's accounts payable cycle has extended from 200 days to around 280 days; NIO's cycle has extended from 200 days to 300 days; XPeng's cycle has extended from 170 days to 230 days. Tesla is one of the fastest auto companies in terms of payment, with its accounts payable settlement cycle even shortened.

Additionally, Li Auto's settlement cycle is around 200 days, while NIO's exceeds three months.

Tesla and Xiaomi are considered among the "customers" favored by suppliers.

Tesla's Vice President, Tao Lin, responded to the payment cycle on her personal social media platform, stating that Tesla's settlement cycle with suppliers has shortened again compared to last year, "now requiring only around 90 days."

She stated that quick payments to suppliers do not necessarily mean raising product prices. Tao Lin pointed out that "cost control = technological innovation to improve efficiency + reducing all unnecessary expenses."

She expressed that while safeguarding suppliers' interests, Tesla continues to invest in research and development and production, striving to provide consumers with better prices and products.

It is reported that, besides Tesla, Xiaomi's payment cycle is also fast. Previously, a video titled "Striving to Become a Xiaomi Supplier" circulated online, mentioning that some companies "would rather reject other orders to become a Xiaomi auto supplier."

Financial reports show that Xiaomi Group can achieve payments within 82 days, which is relatively fast. Other sources claim that Xiaomi also pays suppliers a "guarantee fee" and does not require suppliers to share R&D expenses, promising to pay in full within the stipulated time for mass production.

Industry insiders have called for leading auto companies to enhance their contributions to the industrial chain and their sense of social responsibility, striving for mutual benefit and progress with suppliers.

Image Source: Tesla, Tao Lin's Weibo