Tesla China has made significant strides in improving its payment cycle to supply chain partners, reducing it to around 90 days from about 101 days in 2023. This development was shared by Tesla’s Vice President of External Affairs, Grace Tao, in a recent Weibo post.
The carmaker has earned a reputation for being financially friendly towards its suppliers, a trend that has only strengthened this year. According to Tao, Tesla’s payment cycle to supply chain partners in China has been consistently decreasing, with the latest figure standing at 90 days.
Comparing Tesla’s payment practices to other new energy vehicle (NEV) makers, a chart attached to Tao’s Weibo post revealed that Tesla’s payment cycle is significantly shorter than that of its competitors. Nio, Xpeng, and BYD were reported to have much longer payment cycles, with some exceeding 200 days.
Tao emphasized the importance of strong partnerships with local suppliers, noting that over 95 percent of Giga Shanghai’s components are sourced locally. She highlighted the need for collaboration and innovation to enhance efficiency and reduce costs, ultimately benefiting both the industry and consumers.
In light of recent demands for price cuts from suppliers by local players like BYD and SAIC Motor, Tao’s post serves as a reminder of Tesla’s commitment to fair and sustainable business practices. While some companies are seeking cost reductions, Tesla’s focus remains on nurturing strong relationships with its suppliers.
The automotive industry is no stranger to such negotiations, with suppliers often facing pressure to lower prices. However, Tesla’s approach of fostering long-term partnerships and prioritizing mutual growth sets it apart in the competitive market.
Overall, Tesla’s efforts to streamline its payment cycle and maintain strong ties with its supply chain partners reflect its dedication to sustainable business practices and long-term success in the rapidly evolving automotive industry.
