Wait until you here how suppliers across Chinese car supply chains are battling with their debt burden.

Chinese EVs aren’t only so cheap because of forced labour, a 996 working culture, weak labour rights, acess to cheap land and loans, and subsidies. There are more reasons, one of them being its practice to squeeze its suppliers.

As one investigation reveals about Chinese supplier payment float,

… Another way Chinese OEMs lower costs is by minimizing financing needs through very long supplier payment terms. In 2023–24, BYD took an average of about 155 days to pay suppliers, Geely 149 days, and Leapmotor a staggering 225 days. This stands in sharp contrast to Western peers, whose payment terms are far shorter—roughly 60 days for Tesla, 43 for Volkswagen, and 41 for Toyota—indicating that they have not followed their Chinese rivals’ practices.

While this practice benefits OEM cash flow, it has severe consequences for suppliers, limiting their ability to reinvest in capex and R&D and potentially undermining quality—posing longer-term risks for China’s auto industry. Beijing has begun to rein in excessive payment delays, but enforcement has been slow. In 2025, Chinese OEMs’ payment terms remained far longer than those of Western counterparts …

China’s leading carmaker BYD even controls suppliers with D-chain, a ‘inhouse’ payment system,

BYD typically follows a net 30 to 60 payment cycle, with the D-chain system adding an additional six to eight months to that period. In practice, that stretches the total payment period to between eight and 10 months.

That approach greatly reduces BYD’s financial pressure, but is to the considerable disadvantage of its suppliers.

By tying its suppliers to the D-chain platform, BYD can integrate them into its own financial ecosystem, tightening control over its supply chain.

The model also allows BYD to circumvent traditional financial oversight, as it avoids issuing regular commercial paper and standard banking transactions.