Major electric vehicle battery producers in China said on Monday they will accelerate their payment schedules for suppliers, promising to settle most invoices within 60 days as part of a coordinated effort to reduce financial pressure across the auto supply chain.
The pledge was announced under an initiative led by the China Automotive Battery Innovation Alliance. Members of the alliance including power and energy storage battery companies CATL, CALB and Sunwoda committed to pay suppliers for raw materials and components within 60 days, the alliance said.
Industry officials have framed the move as a response to mounting stress on suppliers. Price competition and weakening vehicle demand have squeezed margins across China’s auto industry, and suppliers have increasingly reported delayed receipts of payments that have strained their operations.
Chinese authorities issued rules last year asking large companies to settle most payments within 60 days. On Monday the alliance reiterated that guidance and urged companies to ensure smaller suppliers are paid within 60 days or to negotiate reasonable terms with larger partners, seeking to protect cash flows at the lower end of the supply chain.
The industry ministry said 11 battery makers had responded to the alliance initiative. In a statement the ministry warned that prolonged payment cycles by power and energy storage battery firms “directly strain suppliers’ cash flow, weaken their capacity to invest in technological innovation, and undermine the long-term development of firms across the industrial chain.”
While battery prices have declined, batteries still represent a significant share of vehicle production costs. Smaller suppliers have been particularly vulnerable to cash shortages, the ministry and alliance noted, especially as input costs have risen in part due to inflation attributed to the Iran war. Those rising input costs have exacerbated liquidity challenges for firms with delayed receivables.
The recent pledges follow comparable commitments from major Chinese automakers in June 2025, which came after public complaints from steelmakers about delayed payments. Industry officials framed the battery makers’ commitments as a continuation of broader attempts to stabilize supplier finances across the automotive ecosystem.
Context and implications
- Industry-wide adherence to 60-day payment terms aims to ease short-term cash pressures on suppliers and support longer-term investment capacity.
- The initiative involves major battery producers within the China Automotive Battery Innovation Alliance, including CATL, CALB and Sunwoda.
- Regulatory guidance issued last year already encouraged large companies to settle most payments within 60 days, and the ministry said 11 battery makers have participated in the latest initiative.