Key Facts
• June 2025: Chinese automakers, including BYD, pledged supplier payments within 60 days.
• Payment cycles previously extended to hundreds of days for companies like BYD.
• Ministry of Industry and Information Technology criticized long payment periods for harming suppliers.
• 17 automakers committed to the 60-day rule; only SAIC and BAIC rejected promissory notes.
• BYD’s promissory notes totaled $560 billion (May 2023), enabling delayed payments.
• New regulations (June 2025) mandate 60-day payments for government and large firms.
• Suppliers report automakers may exploit loopholes, such as promissory notes.
• Small businesses face severe challenges, with payments often delayed by six months.
• BYD’s net debt exceeds 10 times its book value due to delayed payments.
• 2024: 16 NEV manufacturers exited the market, while 13 new entrants emerged.
Summary
Chinese automakers, including BYD, have pledged to pay suppliers within 60 days, addressing long-standing delays that strained supplier finances. This move aligns with new government regulations aimed at curbing harmful practices like promissory notes. While some automakers, such as SAIC and BAIC, committed to cash payments, others remain vague on methods. BYD’s reliance on promissory notes, totaling $560 billion, highlights the industry’s financial pressures amid intense competition. Small suppliers, often waiting six months for payments, face growing challenges. The Ministry of Industry and Information Technology emphasized the need for timely payments to stabilize the sector. However, skepticism persists, with suppliers fearing loopholes and questioning enforcement. The auto industry, already grappling with market exits and new entrants, remains under scrutiny as stakeholders await tangible improvements.
