On November 28th, Caixin News Agency reported that Tesla's (TSLA) global vice president Tao Lin posted a picture on Weibo showing the change in payment time for Chinese new energy vehicle manufacturers to suppliers. She said that in 2024, Tesla's payment cycle to supply chain partners will be shortened compared to last year, and now it only takes about 90 days.
Tao Lin also shared the supply chain situation of Tesla's Shanghai Gigafactory, emphasizing that "more than 95% of the components in the Shanghai Gigafactory come from local suppliers, and Tesla's achievements in China and even globally are inseparable from these partners. By working together with supplier partners to achieve win-win results and improve efficiency and reduce costs through technological innovation, the enterprise can go further, the industry can be more prosperous, and consumers can continue to receive the best products
Tao Lin's statement not only demonstrates Tesla's emphasis on China's domestic supply chain, but also reflects how Tesla enhances its competitiveness through optimizing supply chain management in its globalization strategy. The deep cooperation between Tesla and local suppliers not only promotes the development of the local parts industry, but also enhances Tesla's response speed and product quality in the global market.
As an important production base for Tesla globally, the high degree of localization of its supply chain at Tesla's Shanghai Gigafactory reflects Tesla's deep layout and commitment to the Chinese market. Through close cooperation with local suppliers, Tesla has not only reduced production costs, but also improved the flexibility and reliability of its supply chain.
The day before Tao Lin's statement, an email showing that BYD (002594/01211) requested suppliers to reduce prices by 10% starting from 2025 leaked. The email content with the theme of "BYD Passenger Vehicle Cost Reduction Requirements in 2025" shows that BYD requires relevant suppliers to reduce the price of their supplied products by 10% from January 1, 2025. Regarding this, Li Yunfei, General Manager of Brand and Public Relations Department of BYD Group, posted on Weibo on the 27th, saying, "Annual bargaining with suppliers is a common practice in the automotive industry. Based on large-scale procurement, we propose price reduction targets to suppliers, which are not mandatory requirements. Everyone can negotiate and push forward