BEIJING, June 29 (Reuters) – Major Chinese electric vehicle battery makers on Monday pledged to pay their suppliers more quickly, as part of wider efforts to ease financial strain across the auto industry.
Price wars and weakening demand have squeezed margins across China’s vehicle industry, where suppliers have suffered from increasing delays in receiving payments.
Last year, Chinese authorities issued rules requiring big companies to settle most payments within 60 days.
In line with an initiative on Monday by the China Automotive Battery Innovation Alliance, power and storage battery companies CATL and CALB and Sunwoda, which are members of the alliance, committed to pay those who supply them with the commodities and components they need within 60 days.
The alliance, representing major players across the battery ecosystem, in a separate statement, urged companies to pay smaller suppliers within 60 days or negotiate reasonable terms with larger partners.
Eleven battery makers have responded to the initiative, the industry ministry said.
“Excessively long payment cycles by power and energy storage battery companies to their suppliers 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,” the ministry said in a statement on Monday.
Batteries have become cheaper, but still account for a significant portion of vehicle production costs. Smaller suppliers in particular have faced cash shortages as a result, especially as input costs have increased, in part because of inflation linked to the Iran war.
The pledges on Monday follow similar commitments by major Chinese automakers in June 2025, after steelmakers publicly complained about payment delays.
(Reporting by Qiaoyi Li and Ryan Woo; editing by Barbara Lewis)
Comments