Nio, BYD & Xpeng EV makers taking longer to pay bills amid rising stress

$BYD COMPANY(01211.HK)$ $Tesla(TSLA.US)$ $NIO Inc(NIO.US)$ $XPeng(XPEV.US)$ The time it’s taking for some of China’s electric-car makers to pay suppliers is ballooning - a further sign of stress in the nation’s increasingly cutthroat auto market.
1) Nio Inc. was taking around 295 days to clear its receipts payable, the vast majority of which are owed to suppliers, at the end of 2023 versus 197 days in 2021.
2) Xpeng Inc., another US-listed Chinese EV maker, was taking 221 days to honor its obligations to vendors and related parties, up from 179 days, the data show.
3) Tesla Inc., by comparison, only took around 101 days, and that period has remained largely stable in the past three years.

My Take: We can look at the cash reserves or FCF (free cash flow) of the EV makers to see if there are signs of any liquidity issue. Not long ago, there were rumours that Nio is facing bankruptcy and the CEO is raising funds by further diluting the share - sell more convertible bonds. If this is true, the stock will dip further. Nio and Li Auto started to cut manpower and were not widely reported as compared to Tesla.

2. Tesla's Free Cash Flow compared to other EV startups

3. Nio's Annual Loss widen post Net Loss US$2.9 billion in 2023