Key facts
- Chinese industry associations are urging battery manufacturers to shorten payment terms.
- Manufacturers are being asked to pay suppliers within 60 days.
- Payments should be made exclusively in cash.
- The initiative is backed by the Chinese government.
- The goal is to ease financial strain on upstream suppliers.
Two major Chinese industry associations are urging power and energy storage battery manufacturers to shorten payment terms for small and midsize suppliers to no more than 60 days and settle accounts exclusively in cash. The initiative, backed by the Chinese government, aims to ease financial strain on upstream suppliers amid a widening industry imbalance. Battery and raw material producers are currently reaping massive profits, while downstream automakers struggle with shrinking margins.