Author: Chao Yi, Editor: Du Peng
"De-Ningdeshidai-ization" is currently the most controversial topic in the industry.
The incident was triggered by multiple new energy vehicle (NEV) giants reducing the supply proportion of Ningdeshidai.
Among them, Lixiang Auto has attracted the most attention. The all-new generation Lixiang L8, launched in June 2026, exclusively adopts Xinwangda battery cells. Shortly after, in early September, Lixiang Auto announced a capital increase of CNY 2.65 billion in Xinwangda Power. Upon completion of the transaction, it holds an 11.17% stake, becoming the second largest shareholder of Xinwangda Power.
According to media reports, "Because the orders for Lixiang MEGA exceeded expectations, Ningdeshidai's 5C ternary lithium battery reserves cannot keep up. It will subsequently switch to Lixiang's self-developed 5C ternary battery, with deliveries expected to start in November."
Next is Xiaomi Auto. Its newly launched Pengcheng N70 and N90 did not continue the route of using Ningdeshidai batteries for the SU7 and YU7. Instead, they directly adopted Xiaomi's own Longjia Battery System, with all battery cells supplied by Zhongchuang Xinhang and Xinwangda.
Calculations based on third-party installation data show that Lixiang and Xiaomi alone account for a combined 13.6% of Ningdeshidai's domestic installed capacity. (Source: Gelong)
In addition, the Wenjie system, represented by Hongmeng Zhixing, is also loosening its ties. The 408th batch announcement shows that the pure electric version of Wenjie M6 is equipped with Guoxuan's LFP batteries, and Hongmeng Zhixing has simultaneously introduced Zhongchuang Xinhang; high-end models like M9 and Zunjie still retain Ningdeshidai battery cells. Lingpao and Zhongchuang Xinhang have established a joint venture to build a factory, and Guoxuan's share in its supply has increased; Xiaopeng, Guangqi Aian, Geely, Chery, Chang'an, and Shangqi have respectively expanded their battery supplier lists through secondary suppliers, self-development, and joint ventures.
The strategic intention of these automakers is very obvious: they no longer put all their eggs in the basket of Ningdeshidai.
Of course, this may just be the surface reason. Our analysis suggests that the true cause of the struggle between Ningdeshidai and its supply chain may be the severe imbalance of "profit, cash flow, and assets and liabilities."
According to statistics from the 24 Chao Industry Research Institute (TTIR), in the first half of 2026, Ningdeshidai achieved operating revenue and net profit attributable to parent company of CNY 276.917 billion and CNY 43.284 billion, representing year-on-year growth of 54.80% and 41.98%, respectively. Its revenue accounted for 21.87% of the 11 major listed NEV automakers (Biyadi, Geely Automobile, Shangqi Group, Changcheng Auto, Chang'an Auto, Lingpao Auto, Weilai, Sairuisi, Xiaopeng Auto, Lixiang Auto, and Guangqi Group) during the same period. However, Ningdeshidai's profitability is 2.78 times the total net profit of these 11 listed automakers.
If Biyadi, which has fully achieved self-supply of battery cells, is excluded, the profitability gap between Ningdeshidai and other automakers becomes even more exaggerated. The combined net profit attributable to parent company of the other 10 NEV giants is only CNY 3.217 billion (a year-on-year decrease of 75.14%). Ningdeshidai's profit alone is 13.45 times that of these 10 NEV giants.
Looking across the entire lithium battery manufacturing sector, Ningdeshidai's profitability is also exceptionally strong. According to statistics from TTIR, in the first half of 2026, six listed lithium battery manufacturing companies, including Yiwei Lineng, Xinwangda, Guoxuan High-Tech, Zhongchuang Xinhang, Reipu Lanjun, and Zhengli Xinneng, achieved a combined operating revenue and net profit attributable to parent company of CNY 159.084 billion and CNY 7.301 billion. Ningdeshidai's revenue generation capability is 1.74 times the total of these six companies, and its profitability is 5.93 times theirs.
Further breakdown reveals that Guangqi Group, Lixiang Auto, Xiaopeng Auto, Sairuisi, and Weilai have all fallen into losses. The combined loss of these five automakers reached CNY 14.516 billion, a year-on-year decrease of 31.62%. During the same period, Biyadi still achieved a profit of CNY 12.325 billion.
Another focal point of the struggle between Ningdeshidai and automakers lies in "advance payments." Financial reports show that by the end of 2026, the scale of Ningdeshidai's advance receipts (contract liabilities) reached CNY 36.483 billion, which is 5.89 times the total of the aforementioned six listed lithium battery manufacturing companies.
If the industry continues to improve, advance payments of this scale might still be bearable. However, accompanied by the fierce competition among automakers, this exerts tremendous pressure on their cash flows. In the first half of 2026, the operating cash flows of four automakers, including Sairuisi, Chang'an Auto, Guangqi Group, and Lixiang Auto, were all negative, totaling CNY -36.969 billion, a year-on-year decrease of 282.06%.
In fact, not only the automakers, but also the upstream material suppliers are bearing pressure from Ningdeshidai.
According to statistics from TTIR, as of the end of June 2026, Ningdeshidai's notes payable and accounts payable totaled CNY 355.487 billion (a year-on-year increase of 68.97%). Another set of data shows that in the first half of 2026, the turnover days of Ningdeshidai's accounts payable and notes payable were about 265 days, while the turnover days of accounts receivable from downstream customers were only about 54 days, a difference of 211 days.
This means that Ningdeshidai's collection cycle from downstream customers is less than two months, while the average collection cycle for Ningdeshidai's suppliers is nearly nine months.
The controversy is still expanding and spreading. One of the most iconic events is that in May 2025, Hanchuan Zhineng, a listed company on the SSE STAR Market, sued Ningdeshidai and its two subsidiaries in court, involving an amount of CNY 60.8799 million. The reason for the lawsuit is that Hanchuan Zhineng claimed it had fulfilled the obligations of delivery, installation, and debugging as stipulated in the contract. However, after Ningdeshidai and its subsidiaries put the equipment into operation, they failed to make payments as agreed, and the delayed payment behavior constitutes a serious breach of contract. Financial reports show that Hanchuan Zhineng lost CNY 1.103 billion in 2024 (a year-on-year decrease of 1204.76%), and the net operating cash flow was CNY -189 million. The impact of this defaulted payment on the company is self-evident.
According to the announcement by Hanchuan Zhineng on May 8, 2026, all parties have currently reached a settlement and withdrawn the lawsuit. Shidai Dianfu and Ningdeshidai have paid the corresponding payments for goods in accordance with the settlement agreement, totaling CNY 43.1983 million. "This settlement and withdrawal of the lawsuit is conducive to the normal conduct of the company's production and operation, and will have a certain positive impact on the profit in 2026, safeguarding the company's interests to the greatest extent," Hanchuan Zhineng stated.
Our analysis reveals that Tesla, often benchmarked by NEV companies, had an accounts payable turnover days of only 62.76 days in the first half of 2026. Tao Lin, Vice President of Tesla's External Affairs, once publicly stated that Tesla's success relies not only on low costs but also on "symbiosis and win-win" with suppliers and continuous "technological innovation." "Cost control = technological innovation + efficient management + reducing all unnecessary expenses. Protecting the interests of suppliers does not mean raising product prices."
Many years ago, Ren Zhengfei of Huawei mentioned a strategy at the "Commendation Conference for Struggle in the Operation and Delivery System," which is "dredge the riverbed deep, and build the weir low." He stated that "dredge the riverbed deep, and build the weir low" is a profound management philosophy left to us by Li Bing and his son more than two thousand years ago. The contemporary Hanging Gardens of Babylon, Roman aqueducts, and bathhouses have long vanished. Yet Dujiangyan still irrigates and benefits the Chengdu Plain. Why?
"The weir management principle of 'dredge the riverbed deep, and build the weir low' left by Li Bing is the main 'secret' to the enduring vitality of Dujiangyan. The wisdom and principles contained in it go far beyond water management itself. If Huawei wants to survive forever, these principles are also applicable to us. 'Dredge the riverbed deep' means continuously tapping into internal potential, reducing operational costs, and providing more valuable services to customers. Customers will never pay an extra cent for your glamorous image or high welfare. For any of our desires, except through hard work, do not expect manna from heaven. The company's short-term irrational welfare policy is like drinking poison to quench thirst. 'Build the weir low' means restraining one's greed, keeping less profit for oneself, giving more concessions to customers, and treating upstream suppliers well. Future competition is the competition between one industrial chain and another. The overall strength of the industrial chain from upstream to downstream is the foundation of Huawei's survival," Ren Zhengfei said.
Wind data shows that as of the end of June 2026, the scale of Huawei's "accounts payable and notes payable" was CNY 120.938 billion, which is nearly the same as the scale of accounts receivable and notes receivable (CNY 121.867 billion), and its accounts payable and notes payable turnover days were 83.83 days.
The impact of the struggle between Ningdeshidai and its supply chain has already become evident in the capital market. As of the close on October 9, Ningdeshidai's total market capitalization was CNY 1.4 trillion. Compared to its peak (close on May 6, 2026), its market value has evaporated by CNY 750.8 billion, a drop of 34.83%, while the Shanghai Composite Index fell by 8.33% during the same period.
As an editorial recently published by the Jingji Guancha Bao stated: "(De-Ningdeshidai-ization) is a wake-up call for Ningdeshidai. Ningdeshidai, and even the entire automotive industry, must solve this problem: how to build healthier industrial relations. In the NEV industrial chain, only the power battery segment is profitable, while upstream material suppliers and downstream complete vehicle manufacturers have fallen into a relatively passive position. If this is unsustainable, Ningdeshidai, which is at the core of the industrial chain, cannot remain unaffected."