China Battery Makers Back 60-Day Supplier Payment Cap
China’s battery industry has introduced a 60-day payment benchmark for small and medium-sized suppliers, extending a campaign against long payment cycles from vehicle makers into batteries and energy-storage systems.[1]
The voluntary initiative was issued on June 29 by the China Automotive Power Battery Industry Innovation Alliance and the China Energy Storage Alliance. Securities Times reported that CATL, FinDreams Battery, Sunwoda EVB, EVE Energy and HyperStrong were among the companies that responded.[1]
Payment Terms Would Be Capped at 60 Days
For suppliers classified as small or medium-sized enterprises, the initiative calls for buyers to pay no later than 60 calendar days after delivery or acceptance. If the payment date falls on a statutory holiday, it may move to the next applicable date.[1]
The proposal also encourages bank transfers and other cash-based settlement methods. Its scope is broader than the final payment date: it addresses purchase orders, changes to orders, delivery, inspection, reconciliation and contract duration.
| Procedure | Proposed benchmark | Why it matters |
|---|---|---|
| Payment to SME suppliers | Within 60 calendar days | Sets a visible upper limit for the stated payment cycle |
| Materials and components inspection | Generally within 7 working days | Limits delays before the payment clock can begin |
| Equipment, testing and other services | Maximum period stated in the contract | Makes acceptance timing explicit before delivery |
| Supplier relationship | Long-term framework agreements encouraged | Supports more predictable production and procurement planning |
Seven-Day Inspection Rule Targets Hidden Delays
A nominal 60-day term does not protect a supplier if acceptance or reconciliation can be postponed indefinitely. The initiative therefore says materials and components should generally be inspected within seven working days after receipt. Other goods and services should have a maximum inspection period written into the contract.[1]
Once inspection is complete, the buyer should promptly issue proof of acceptance. This connects the stated payment period to operational steps that can otherwise lengthen actual cash collection.
The Policy Focus Is Moving Down the Automotive Chain
Seventeen major automakers previously committed to a 60-day supplier-payment policy after China’s revised regulation on safeguarding payments to small and medium-sized enterprises took effect in June 2025. The battery initiative moves the same governance focus into a key component and system-integration layer.[1]
That extension matters because battery companies are large buyers as well as suppliers to vehicle and energy-storage producers. Clearer payment and acceptance procedures can therefore transmit through multiple tiers of the manufacturing chain.
Industry Context: Battery Suppliers Carry Upfront Costs
China’s power-battery and energy-storage supply chain includes lithium chemicals, cathode and anode materials, separators, electrolytes, copper foil, structural parts and manufacturing equipment. Suppliers commonly commit funds to materials, labor, logistics and equipment before receiving payment from larger customers.[1]
Long collection periods can increase financing needs and uncertainty for smaller manufacturers. In a sector with rapid product and process changes, cash tied up in receivables can also constrain spending on testing, quality control and production upgrades.
Major Battery Companies Have Publicly Responded
According to the report, CATL said it would work with supply-chain partners to build a compliant and mutually beneficial industry ecosystem. FinDreams Battery and Sunwoda EVB said they would apply the initiative across order confirmation, delivery, acceptance, settlement and contract management.[1]
The commitments are voluntary statements rather than audited payment results. Their practical effect will depend on contract language, acceptance practices and whether suppliers receive funds within the stated period.
What to Watch Next
The next test is implementation. Useful indicators include the number of battery and system-integration companies adopting the benchmark, reported supplier collection periods, acceptance-cycle data and any contract changes disclosed by listed manufacturers.
It will also matter whether the approach spreads beyond first-tier suppliers. Smaller companies deeper in the battery materials and equipment chain may face different bargaining power and financing constraints.
Follow related developments in CII’s China Supply Chain archive.
