Electric vehicle suppliers in China are seeing a slight improvement in payment timelines following new government regulations introduced in September 2026. Data from the China Association of Automobile Manufacturers indicates the average payment period has dropped to 54 days, a reduction of approximately 10 days compared to the same period last year.
Operational strain on the supply chain
The automotive sector’s reliance on extended credit had previously pushed many smaller firms to the brink of insolvency. An investigation by the Economic Observer published in September 2026 revealed that the financial burden on suppliers had grown significantly throughout the preceding year. Analyzing data from 14 major automakers, the report found that the average accounts-payable and notes-payable turnover period climbed from 164.4 days at the end of 2025 to 187.5 days by the first half of 2026.
This trend forced many suppliers to seek external financing just to cover basic operational costs, including worker wages and the procurement of raw materials. The widening gap between the delivery of components and the receipt of payment threatened the stability of the broader EV manufacturing ecosystem.
Regulatory intervention in payment cycles
To address these liquidity issues, Beijing moved to standardize payment practices across the industry. This regulatory effort followed a series of commitments made by 17 major vehicle manufacturers last year, in which they pledged to cap supplier payment periods at 60 days. The formal rules introduced in September 2026 were designed to ensure these promises were codified into enforceable industry standards.
According to data tracked by the China Association of Automobile Manufacturers, these measures have begun to shift the status quo. By shortening the average payment duration to 54 days, the industry has moved closer to the 60-day target originally established by the major manufacturers. Whether the current 54-day average will hold as production volumes fluctuate is uncertain.
