BYD Shifts Payment Strategy Amid Supplier Pressure, Regulatory Scrutiny
China's electric vehicle giant BYD is abandoning its in-house financial platform for supplier payments, marking a significant pivot from a practice that once fueled its rapid expansion. The company notified suppliers of its intention to transition to commercial paper or bank notes, phasing out promissory notes issued through its Dilian system.
The MOVE comes as China's auto sector grapples with a brutal price war, squeezing parts manufacturers who face delayed payments and relentless cost-cutting demands. Regulatory pressure is mounting, with authorities implementing new rules to accelerate payments and improve industry standards.
While BYD maintains its Dilian platform complies with regulations, the shift suggests growing sensitivity to supplier relations in an increasingly competitive market. The company reports increasing payments to suppliers this year, though the scope and timeline of the transition remain unclear.
