Key facts
- Two major Chinese industry associations are urging battery manufacturers to shorten payment terms.
- The recommended payment term is 60 days.
- Manufacturers are also urged to pay suppliers in cash.
- The initiative targets power and energy storage battery manufacturers.
- The goal is to ease financial strain on upstream suppliers.
- Industry imbalances are cited as a reason for the financial strain.
Two significant Chinese industry associations are pushing power and energy storage battery manufacturers to accelerate payments to their suppliers. The core of the recommendation is to reduce payment terms to a maximum of 60 days and to prioritize cash transactions over other forms of payment. This push is a direct response to the financial difficulties currently being experienced by upstream suppliers within the battery manufacturing ecosystem. The industry associations aim to address imbalances that have led to this strain, seeking to create a more stable and predictable financial environment for all participants in the supply chain. By encouraging faster and cash-based payments, the initiative hopes to improve the liquidity and operational capacity of suppliers, thereby strengthening the overall resilience of China's battery industry.