Tesla China continues to improve relationship with suppliers

Tesla China continues to improve its relationship with suppliers. Tesla China recently announced that its payment cycle with suppliers has shortened to around 90 days.

Tesla China’s Vice President of External Affairs, Grace Tao, announced on Weibo that the company has shortened its payment cycle with supply chain partners once in a recent Weibo post. Tesla China’s payment cycle for suppliers was 100 days in 2023.

In her Weibo post, Tao emphasized that 95% of Tesla Giga Shanghai’s components are from local suppliers in China. She also mentioned that Tesla has been able to accomplish a lot in China and around the world because of its close ties to Chinese suppliers.

According to CN EV Post, Tao Weibo post about Tesla China’s relationship with its suppliers draws a striking different between the US-based company and BYD. In a recently leaked letter, BYD was shown asking some suppliers to cut prices for passenger car components by 10% by January 1, 2025.

The leaked letter sparked talks in China. BYD General Manager Li Yunfei replied to the growing interest in the letter’s contents, stating that renegotiating prices with suppliers was an annual practice. The China Securities Journal confirmed Yunfei’s comments after finding a similar letter from SAIC Maxus discussing prices with suppliers sent on November 25. SAIC Maxus also requested a 10% reduction in prices for car parts.