BYD just posted its fourth straight quarter of falling profits. Share prices fell. However, this decline will continue and normalise only at the end of this year, 2026.

The regulation behind the debt spike

For years, BYD ran one of the auto industry's most aggressive supplier-financing models. It paid vendors an average of 275 days in 2023 and roughly 127 days in 2024, often using its in-house "Dilian" promissory-note platform rather than cash — effectively turning unpaid suppliers into a source of free working capital.

That changed in 2025. Beijing's SME Payment Regulation, effective June 1, 2025, legally caps payment terms at 60 days, and bans forcing smaller suppliers to accept non-cash IOUs as a delay tactic. BYD, along with 16 other major automakers, publicly pledged to comply. By Q3 2025, BYD's payment cycle had collapsed to roughly 57 days.

That's good news for suppliers and for industry health —