More than a year after 17 major Chinese automakers signed a collective pledge to pay suppliers within 60 days, a new analysis shows that most are actually taking longer to settle their bills. According to a report by Economic Observer (经济观察报), 13 of 14 listed carmakers lengthened their payment cycles in the first half of 2026, with only Li Auto shortening them.
The report, based on Wind data, found that the average days payable outstanding (DPO) for 14 carmakers rose to 187.5 days in H1 2026, up 23.1 days from the end of 2025. This contrasts sharply with a February survey by the China Association of Automobile Manufacturers (CAAM), which claimed that most major automakers had cut payment times to within 60 days, averaging about 54 days. The discrepancy stems from different calculation methods: CAAM measures the time from acceptance or reconciliation to actual payment, while the financial metric divides accounts payable by cost of goods sold, which can overstate the figure because it excludes unsold inventory and includes acceptance bills.
Pressure mounts on automakers
Among the 14 carmakers, Seres had the longest DPO at 252.7 days, followed by Xpeng (231.4 days), JAC (219.0 days), Changan (216.7 days), and Leapmotor (214.4 days). GAC Group had the shortest at 129.4 days, with BYD at 141.2 days and Geely at 141.7 days. On a year-on-year basis, eight carmakers lengthened their cycles, with Xpeng adding 61.4 days, Chery 39.7 days, and Leapmotor 31.9 days. Only Li Auto and BAIC BluePark reduced their DPO, by 45.8 and 67.1 days, respectively.
The main reason for the lengthening cycles is squeezed profitability. National Bureau of Statistics data cited in the report show that in the first half of 2026, the auto industry's revenue grew 1.8% to 5.19 trillion yuan (about $731 billion), but costs rose 2.8%, and profits fell 19.5% to 195.35 billion yuan (about $27.5 billion), leaving a thin 3.8% margin. CAAM deputy secretary-general Chen Shihua said the average profit rate in vehicle manufacturing dropped to 1.5% in H1, the lowest in a decade. Facing cash shortages, automakers find it cheaper to use supplier funds as a financing source.
By the end of Q2 2026, the 14 carmakers' combined accounts payable and notes reached 782.51 billion yuan (about $110.2 billion), up 17.55 billion yuan (about $2.47 billion) from end-2025. SAIC, BYD, and Chery had the largest balances, at 187.06 billion, 176.35 billion, and 145.67 billion yuan respectively. Chery, Leapmotor, and SAIC saw the biggest increases.
In practice, some automakers substitute cash with commercial acceptance bills, supply chain notes, or electronic receivable vouchers, meeting the nominal 60-day target while still tying up supplier funds. Delays in acceptance, reconciliation, invoicing, and vehicle verification also stretch actual payment times. The Ministry of Industry and Information Technology (MIIT) acknowledged in September that the complexity of these steps makes it difficult to enforce the pledge.
Battery makers improve
In contrast, power battery makers improved their payment performance in H1 2026. Eight battery companies cut their average DPO to 231.2 days, down 23.6 days year-on-year, though still about 23% longer than automakers. Among them, Farasis Energy reduced its DPO by 90.0 days to 178.4 days, the biggest improvement, while CALB, EVE Energy, Gotion High-tech, and CATL also shortened theirs. Only REPT Battero lengthened its cycle, to 287.3 days.
The improvement stems from a rebound in the battery sector: H1 installations grew, most companies turned profitable, and global energy-storage cell shipments surged 94.76%, boosting cash flow. Rising raw material prices, including lithium carbonate and lithium hexafluorophosphate, have also shifted bargaining power to suppliers, forcing battery makers to pay faster to secure materials. However, Farasis's improvement was partly due to a halving of its acceptance bills and shrinking procurement, reflecting weaker credit rather than stronger payment ability.
Policy pressure is escalating. On September 7, MIIT and the State Administration for Market Regulation issued the first national document specifically targeting payment terms in the auto industry, detailing rules on start dates, acceptance times, and verification periods, and banning forced acceptance of non-cash payment. On September 10, five ministries called on central state-owned enterprises to pay SMEs promptly, and on September 14, MIIT said it would set up a third-party evaluation mechanism to monitor compliance and intervene against companies that deliberately delay payments.
The 60-day pledge has moved from industry self-discipline to administrative enforcement, but whether suppliers will actually receive cash within 60 days depends on how strictly the rules on start points, acceptance, and non-cash payments are implemented.
