Is the Chinese EV Supply Chain Stable? Daimler Payment Woes & Tech Shakeup

H2: Mercedes-Benz China Supplier Payment Dispute: A Trust Crisis?

The core of this story is a direct challenge to the expected operational norms between an OEM and its Tier 1/Tier 2 partners. A supplier claims that final payment, amounting to approximately 1.48 million RMB (pre-tax), for an AMG project delivered back in 2022 remains unpaid. [cite: SOURCE_DATA] According to the report, despite an audit confirming the payable amount, Mercedes-Benz China allegedly offered a series of excuses for the delay, only issuing a notice to allow for invoicing in mid-December 2025. [cite: SOURCE_DATA]

H3: Why This Matters to Western Stakeholders

For a Western audience accustomed to robust contract law and predictable payment cycles, a two-year delay on a final invoice, even if unconfirmed by official sources, is a major red flag. It underscores:

• Supply Chain Leverage: The power dynamic in China allows large OEMs to exert significant, potentially damaging, financial pressure on smaller suppliers.
• Reputational Risk: While these issues often occur beneath the surface, such public allegations erode confidence in long-term partnerships with European incumbents operating in the Chinese ecosystem.
• Broader Context: This is not happening in a vacuum. China’s industry ministry has recently launched platforms to accept supplier complaints regarding overdue payments, driven by widespread pressure from the ongoing price war. This suggests that delays and non-cash settlements (like commercial paper) are systemic, affecting both domestic and foreign-funded operations.

For deeper context on how domestic Chinese players are handling financial pressure, see our analysis on BYD’s financial resilience.

H2: Strategic Shakeup: Harman Acquires ZF’s ADAS Business

In a move that redefines the playing field for in-car intelligence, Harman International (a Samsung subsidiary) is set to acquire ZF Group’s Advanced Driver Assistance Systems (ADAS) business for an enterprise value of €1.5 billion. This acquisition is a clear signal that the future of the vehicle—the Software-Defined Vehicle (SDV)—will be dominated by those who control the integrated compute platform.

H3: Consolidating the Brains: Compute and Safety Merge

The strategic value here lies in the combination of technologies:

• What’s Being Acquired: Compute solutions, smart cameras, radar technology, and ADAS software functions.
• The Synergy: Harman plans to integrate this into its existing Digital Cockpit offerings within a centralized compute design. The goal is to create a single, scalable foundation that seamlessly marries safety (ADAS) with user experience (Cockpit).
• Impact on ZF: For ZF, this is a strategic divestiture allowing them to focus resources on core technologies and reduce debt, while they will continue ADAS activities within their commercial vehicle division. Approximately 3,750 ZF employees are expected to transition to Harman upon the deal’s expected close in the second half of 2026.

Western automakers need to understand that component specialization is giving way to integrated solution providers. Harman is positioning itself as the necessary mid-layer between low-level sensors and the OEM’s final software stack.

H2: Chery Plants Flag in Vietnam Amidst Global Expansion

While the drama unfolds in the supply chain, China’s own giants are aggressively expanding manufacturing footprints to navigate trade barriers and capture emerging markets. Chery plans to build its largest ASEAN factory in Vietnam by mid-2026, with a potential investment of up to $800 million and a 200,000-vehicle annual capacity. [cite: SOURCE_DATA]

Chery’s goal is ambitious: become the third-largest auto brand in Vietnam within five years, leveraging its Omoda and Jaecoo brands, which are already performing well in Europe. [cite: SOURCE_DATA] This move shows a clear strategy to secure left-hand-drive production for the burgeoning region, complementing its right-hand-drive factories in Thailand and Indonesia. [cite: SOURCE_DATA]