China pushes battery manufacturers for faster supplier payments

China is tightening its measures against increasing competitive pressure in the battery industry. Eleven leading battery manufacturers, including CATL, BYD, and CALB, have now committed to paying small and medium-sized suppliers within 60 calendar days in the future.

Catl china guizhou — China aims to strengthen the stability of the battery supply chain with shorter payment terms
Image: CATL

The initiative was jointly published by the China Automotive Battery Innovation Alliance (CABIA) and the China Energy Storage Alliance (CNESA), with support from China’s Ministry of Industry and Information Technology (MIIT). As CN EV Post reports, the measure aims to improve liquidity for small and medium-sized suppliers and strengthen the stability of the battery supply chain.

Under the new guidelines, the payment period begins upon delivery or acceptance of goods. Material and component inspections must generally be completed within seven working days. Additionally, the associations recommend that smaller suppliers be paid primarily via bank transfer, gradually reducing the use of alternative electronic payment methods. Among the companies supporting the initiative are CATL, BYD’s battery division FinDreams, CALB, Eve Energy, and Sunwoda. CATL stated that a stable supply chain is the foundation for the high-quality development of the battery industry and that protecting the legitimate interests of suppliers is part of the company’s responsibility.

The initiative is part of the Chinese government’s efforts to mitigate increasing price pressure and intense competition in the battery sector while preventing liquidity shortages for smaller players. The rapid growth of China’s EV market in recent years has led to significant expansion in production capacities. However, declining margins and overdue payments are placing a burden on many companies along the supply chain.

In addition to shorter payment terms, manufacturers and suppliers are encouraged to rely increasingly on long-term framework agreements to further enhance supply chain stability. The MIIT announced that it will monitor the implementation of these measures and address existing issues in collaboration with the participating companies. The new payment rules are part of a broader series of measures to stabilise China’s battery industry. Just a few days ago, CATL, together with automotive manufacturers and technology companies, founded the ‘Global Energy Circular Economy Alliance‘. The alliance is working on common standards for circular batteries and aims to present guidelines for uniform battery and recycling concepts by 2027.

cnevpost.com