BYD’s total borrowings soared to RMB 113.4 billion ($16.6 billion) in 2025 — up from RMB 28.5 billion the year prior — as the world’s largest EV maker overhauled the supplier payment system that had quietly funded years of breakneck growth, the Financial Times reported. The restructuring stems from a June 2025 WeChat post in which BYD pledged to pay suppliers within 60 days, a direct response to Beijing’s anti-involution (反内卷) campaign against excessive payment delays across the auto sector. BYD had long operated a proprietary supplier financing platform called Di Lian (迪链), under which it settled bills with promissory notes — essentially IOUs — stretching payment cycles to as long as 300 days for some of the estimated 10,000 suppliers on the system. As it transitions to conventional commercial bank notes and cash, BYD’s notes payable surged to RMB 48.6 billion, nearly 20 times the 2024 figure. By Q1 2026, short-term borrowings had risen another 72% to RMB 66 billion. BYD VP Stella Li told the FT Future of the Car summit this month that supply-chain finance was “industry standard” but that the company was in the process of resolving it, and that stronger cash flow would follow.
The shift is taking a visible toll on operating cash flow. Full-year 2025 operating cash flow fell to RMB 59.1 billion from RMB 133.4 billion in 2024; by Q1 2026, the figure had dropped further to RMB 2.8 billion, compared with RMB 8.6 billion in the same period a year earlier. BYD’s current payment cycle stands at 123 days — four days shorter than a year ago but still roughly double Beijing’s 60-day target. Dan Wang of the Eurasia Group said Beijing had deliberately made BYD an example by forcing it to move supplier debt onto formal bank books. Laila Khawaja of Gavekal described BYD’s previous terms as “particularly aggressive” and said the transition was “already putting pressure on its operating cash flow.” GMT Research calculates BYD’s adjusted net debt at roughly RMB 320 billion once de-recognised receivables and excess payables are added back — compared with the headline net cash figure of RMB 22 billion reported for end-2025 — and continues to flag “high” accounting risk due to opacity in disclosures.
Bulls argue the concern is overstated. Taylor Ogan of Snow Bull Capital noted BYD holds a RMB 75.8 billion cash war chest (bolstered by a $5.6 billion Hong Kong equity raise a year ago), carries borrowings at interest rates of just 1.5%–2.9%, and has no overdue debt positions. Eurasia’s Wang added that Beijing has directed state-backed and commercial lenders to provide cheap credit to clean-technology companies, keeping BYD’s funding costs low. BYD itself told the FT that the borrowing surge “primarily” reflected liability restructuring and that concerns about its debt load were “unwarranted.” The overhaul is coinciding with an ambitious overseas push: BYD is building factories in Hungary, Brazil, Indonesia, Thailand, Turkey, and Uzbekistan; launched its own fleet of eight car-carrier ships; achieved 1 million overseas sales in 2025; and is targeting 1.5 million this year, with a longer-term ambition of 5 million.