Advertisement
Chinese EV makers delay payments to vendors as they feel the heat from slowing sales, price cuts
- Extended payment cycle shows that some EV makers are facing liquidity issues, automotive analyst says
- EV sales slumped by 31 per cent quarter on quarter in the three months to March despite massive discounts to shift inventory, CPCA data shows
Reading Time:2 minutes
Why you can trust SCMP
5
Daniel Renin Shanghai
Top Chinese electric-vehicle (EVs) makers from BYD to Xpeng are taking longer to settle payments with suppliers, indicating stress in the industry because of slowing sales and mounting discounts.
Shenzhen-based BYD, the world’s largest EV maker, took 275 days to pay supply-chain vendors in 2023, compared with 219 days in 2022, and 198 days in 2021, data compiled by Bloomberg shows.
Shanghai-headquartered Nio needed 295 days to clear accounts payable last year, increasing from 247 days in 2022, and 197 days in 2021.
Advertisement
The time Guangzhou-based Xpeng took to honour its obligations to suppliers rose to 221 days last year, from 208 days in 2022, and 179 days in 2021.
03:11
Cheap EV alternative to Tesla and BYD takes off in small-town China
Cheap EV alternative to Tesla and BYD takes off in small-town China
“The time taken by carmakers to pay their suppliers is an indicator of their financial health,” said David Zhang, director of WDEF Digital Automotive International Cooperation Research Centre in Hangzhou. “An extended payment cycle shows that some of them are facing liquidity issues and they have to fine-tune their cash-flow management.”
Advertisement
Advertisement
Select Voice
Choose your listening speed
Get through articles 2x faster
1.25x
250 WPM
Slow
Average
Fast
1.25x