China extends 60-day payment cap to EV battery sector

The China Automotive Battery Innovation Alliance and the China Energy Storage Alliance issued new payment guidelines on Monday targeting electric vehicle and energy storage battery manufacturers. Under the framework, buyers of materials and components must complete inspection and acceptance within seven working days after receiving goods. Battery makers must also settle invoices with small and medium-sized enterprise suppliers within 60 calendar days of delivery or formal acceptance — a step designed to ease liquidity constraints upstream and strengthen supply-chain resilience.

Industry Backing

Eleven major industry players have endorsed the initiative, including Contemporary Amperex Technology Limited and BYD's Fudi Battery, the South China Morning Post reported. The backing reflects broad consensus among leading manufacturers to address chronic delays that had squeezed suppliers facing heavy research and development costs and long payment cycles. Authorities increasingly seek to shift strategic industries from volume-driven expansion toward higher-quality growth and stronger pricing discipline.

Anti-Price War Campaign

The measure forms part of Beijing's broader "anti-involution" campaign targeting excessive low-price competition, overcapacity, and weak profitability across strategic sectors. It follows a similar pledge made in June 2025 by seventeen major Chinese carmakers to cap supplier payment periods at 60 days after intense price wars strained the automotive sector. China's Industry and Information Technology Ministry said upstream suppliers had been squeezed by heavy costs and extended cycles, weakening business confidence and supply-chain stability.