China is enforcing stricter payment rules across its EV and energy storage battery sectors in a bid to curb excessive competition and build a more resilient supply chain.
The initiative, jointly issued by the China Automotive Battery Innovation Alliance (CABIA) and the China Energy Storage Alliance (CNESA) on June 29, has been backed by 11 battery manufacturers, including CATL, BYD’s FinDreams Battery, CALB, EVE Energy and Sunwoda. It has also received support from China’s Ministry of Industry and Information Technology (MIIT).
Under the proposal, participating manufacturers have pledged to pay suppliers within 60 calendar days of delivering goods or after product acceptance. The guidance also recommends completing inspection and acceptance procedures within seven working days and encourages cash payments for small and medium-sized suppliers where possible.
The move forms part of China’s wider campaign to curb what Beijing has described as destructive competition across its manufacturing industries. Authorities have increasingly targeted practices such as prolonged payment terms and aggressive price cutting, arguing they undermine investment, innovation and the long-term resilience of industrial supply chains.
The initiative comes amid continued rapid growth in China’s battery industry, but also mounting pressure on manufacturers’ margins. According to CABIA, China produced 1,755.6GWh of EV and energy storage batteries in 2025, up 60.1% year on year, while total battery sales reached 1,700.5GWh. Energy storage battery sales more than doubled to 499.6GWh, an increase of 101.3%, highlighting the sector’s rapid expansion despite increasingly challenging commercial conditions.
Industry analyst Christopher Chico, founder of The Battery Chronicle, said the initiative reflected a growing recognition that battery manufacturers could not afford to see financially viable suppliers fail after years of intense price competition. Writing on LinkedIn, he said prolonged price wars had pushed many cathode and battery materials suppliers into loss-making positions, limiting their ability to invest in new materials and process improvements.
Chico said faster payment terms would help suppliers remain solvent while continuing to support innovation across the battery supply chain. He also argued the initiative could help prevent further supplier failures that would ultimately reduce competition and leave the remaining suppliers with greater pricing power.
The battery industry initiative follows similar commitments made by China’s major vehicle manufacturers last year and extends the 60-day payment principle further into the power and energy storage battery supply chain.
