In the fast-paced arena of the electric vehicle (EV) industry, the trials and tribulations of suppliers have come starkly to light, particularly in the wake of the recent financial turmoil faced by Jiyue, a prominent Chinese electric car manufacturerAs the dust settles on revelations of debts exceeding 7 billion yuan (approximately $1 billion), the peeking cacophony of voices from over 200 suppliers demands urgent attentionThey recount their struggles within a landscape rife with precarious dynamics and escalating tensions.

A supplier's sentiment aptly illustrates the gravity of the situation: "It's like begging on our knees." This deflated plea reflects the frustrations of many who have invested resources and trust in a burgeoning industry that promises tremendous growth yet is fraught with **shifting sands**. The financial revelations about Jiyue, known as Jiyue's struggle against financial mismanagement, come alongside troubling insights unearthed by Baidu's financial team, who identified potential shortfalls of up to 7 billion yuanWith delays in payments dating back to August, anxiety runs deep among suppliers attempting to navigate an increasingly hostile labyrinth.

The challenges are not isolatedThe rise of new energy vehicle (NEV) companies in China has not been a straightforward ascent marked by triumphCompanies like Weima and Neta are grappling with production halts, and Hozon struggles have compounded this instability, suggesting a domino effect that ripples through the supply chainWith Jiyue’s financial incongruities precipitating uncertainty, a stark reality emerges—when one automaker falters, hundreds of suppliers also wobble.

By December 30, as the clock ticked towards the New Year, Jiyue suppliers were met with unsolicited news samples from downstream suppliers, the silence surrounding the challenging fiscal state echoing ominouslySurprisingly, the firm continued to engage suppliers over product inquiries, attempting to place orders, all while deeper issues loomed just beneath the surface

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Strikingly, purchases intended for employee welfare during the holiday season remained on the negotiating table—a perplexing distraction amidst the turmoil.

Contrary to expectations, the financial lifelines that should have sustained suppliers began to frayWang Xin, a pseudonymous supplier whose company is deeply entangled with Jiyue, recounted how assurances from Jiyue's finance team turned into failed commitments. "They said there was plenty in the account, yet 1.1 million remains unaccounted for," he lamented, as the strain of unpaid dues compounded his company's hardships.

The cascading effects are evident as discussions within supplier circles continuously draw attention towards an alarming trend—the increasing burden of delayed payments which is fast becoming a hallmark of the industryUnder the guise of normal operations, suppliers remain extensively undercapitalized, enduring what many deemed as the "investment" necessary to keep their businesses afloat.

For suppliers, this grim situation is further exacerbated by the habitual practices contributed by larger car companies to protect their financial interests at all costs, including pressuring suppliers to advance payments for parts and materials, fundamentally altering the power dynamics in the auto supply chainThese practices have left many suppliers feeling vulnerable and trapped in a vicious cycle of financial uncertainty.

Amid all this turmoil, the automotive supply chain has become a complex web where financial stability is under constant threatA supply chain director from a Tier 1 supplier noted how traditional stability within the market has erodedInstead, companies now face unpredictable transaction cycles that stretch payment terms into months or even years—a complete reversal of expectations for timely transactions in what used to be a more efficient industry.

In this climate of confusion, significant responsibility has fallen on the shoulders of suppliers, often regarded as mere extensions of the corporations they serve

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As the new energy vehicle market experiences explosive growth, suppliers find themselves squeezed to the brink, as margins shrink while costs of operational overhead remain constantFor many, survival means adopting increasingly precarious financial positions, as they stretch their cash flows to meet the whims of their larger corporate partners.

Despite their fortitude, the strain has proven overwhelming for manyHuang, another supplier deeply embedded within this convoluted ecosystem mentioned how stressed resources and delayed payments reflected a profound concern regarding the structural integrity of their operational foundations. "We are laid bare,” he mused, invoking both sympathy and incredulity at the difficulties ahead.

Navigating this landscape, industry experts observe a concerning trend where automakers engage in practices that prolong payment cycles while seeking to reduce supplier costs—a dynamic that amplifies the power imbalance between manufacturers and their essential suppliersMedia reports suggest that in a bid to maintain profitability, carmakers now routinely demand discounts that can exceed 20%. And suppliers, desperate for business, agree to maintain production in hopes of eventually securing those often elusive payments.

Contrary to their initial assumptions, many suppliers remain without viable recourse to mitigate the strain of an impending collapseLegal measures, although theoretically available, often come at a prohibitive cost that overwhelms their already stretched financesSome suppliers assert, with a sense of resignation, they find themselves bound by the unspoken rule of financial endurance, where tightening margins create an environment fraught with constant negotiation.

Amid these prevailing challenges, the law remains a complex, bureaucratic entitySuppliers may find it arduous to pursue justice when the very individuals meant to support them are absorbed within the factional interests of larger corporations

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