Chinese Automakers Payment Rule: Strong 60-Day Action to Save EV Ecosystem

The global electric vehicle race is intensifying, and the latest update from Asia has once again shifted the spotlight toward China. In a move that could significantly influence the Germany EV industry vs China competition, top Chinese automakers—like BYD, Geely, and Xiaomi—have agreed to a government-enforced reform known as the Chinese Automakers Payment Rule.

As per this bold 60-day policy, all payments to suppliers must be cleared within two months, addressing years of financial strain on small manufacturers.This step has sent ripples through the auto supply chain China news ecosystem, highlighting China’s aggressive approach toward streamlining its EV production model. While Germany’s EV sector continues to focus on premium quality and innovation, China’s rapid policy changes and mass-market scale may give it the upper hand. The question now is: will Europe respond, or fall behind?

Table of Contents

Why Did the Chinese Government Force This 60-Day Rule?

In June 2025, the Chinese government introduced the Chinese automakers payment rule, a new regulation requiring leading car manufacturers like BYD, Geely, Xiaomi, and Chery to clear supplier payments within 60 days. This rule was enforced after mounting criticism over delayed payments that severely affected small and mid-sized vendors. Reports revealed that some automakers had been delaying payments for over 200 to 300 days, creating serious cash flow problems across the auto supply chain. The Ministry of Industry and Information Technology responded by mandating the 60-day limit to stabilize the supply network, increase transparency, and support struggling suppliers in China’s competitive EV sector.

Beyond solving domestic payment issues, this move signals China’s long-term strategy to enhance its position in the global EV market. With the ongoing Germany EV industry vs China debate intensifying, the rule also acts as a strategic response to international scrutiny. While Germany focuses on precision and high-end engineering, China is prioritizing efficiency, policy-driven growth, and mass-scale production. This new policy could help Chinese EV makers gain the trust of global suppliers and investors, potentially setting a benchmark for other nations facing supply chain friction.

Which Automakers Are Affected by the New Payment Rule?

In June 2025, several of China’s top electric vehicle manufacturers officially committed to following the newly enforced Chinese automakers payment rule, which mandates that all payments to suppliers must be made within 60 days. Notable automakers such as BYD, Chery, Xpeng, Xiaomi, FAW Group, and GAC are among the first to align with the regulation. This comes in response to direct pressure from China’s Ministry of Industry and Information Technology, which had earlier issued warnings to 16 major automakers for their long-standing practice of delaying payments, often extending beyond 200 days. The government’s goal is to reduce financial strain on suppliers, enhance liquidity, and ensure stability within the auto supply chain, which has been disrupted by intense pricing wars and late settlements.

Despite these automakers’ pledges of compliance, supplier organizations remain skeptical. Concerns remain about whether corporations will issue cash payments or promissory notes, as well as when the 60-day term will begin – the invoice date or delivery. The implementation of this legislation represents a substantial shift in China’s EV industry, forcing manufacturers to reconsider internal finance systems. It also positions the country as a pioneer in supply chain responsibility, heightening the global comparison of the German EV industry to China. China is setting a potential standard for other automotive industries facing similar issues by putting supplier confidence and payment discipline first.

How Will the 60-Day Payment Rule Impact the EV Supply Chain?

Faster Payments, Stronger Suppliers
The 60-day rule offers quick relief to small suppliers, improving cash flow and reducing dependency on loans.
End to Aggressive Discounting
By controlling price wars, automakers can now focus on stable pricing and better-quality components.
More Reliable Supply Chain
Timely payments build trust, allowing smoother production and stronger partnerships in the EV ecosystem.
Global Benchmark Move
China’s bold step positions it ahead in auto supply chain China news, setting a high bar in the Germany EV industry vs China narrative.

What This Means for Global Rivals Like Tesla, VW, and Hyundai

China’s new 60-day payment rule is setting a high bar for global EV players like Tesla, Volkswagen, and Hyundai. Tesla, which has improved payment timelines in its Shanghai plant, may now face added pressure to match or exceed China’s strict supplier standards. For Volkswagen, which heavily relies on its Chinese joint ventures, this rule adds urgency to enhance supply chain transparency and reliability.

Meanwhile, Hyundai must adapt fast if it wants to stay competitive in Asia’s largest EV market. As Chinese automakers payment rules build supplier trust and operational strength, rivals must now rethink their own finance and sourcing strategies. This shift strengthens China’s position in the global EV race, pushing global brands to raise their game in both speed and supplier support.

Can Germany Learn from China’s Bold EV Reforms?

As the global electric vehicle (EV) competition heats up, China’s ambitious policies have positioned it at the forefront of EV adoption and production. Meanwhile, Germany, Europe’s automotive powerhouse, is working through its own EV transition under legislative hurdles inside the European Union (EU). Can Germany borrow from China’s aggressive EV measures to boost its own EV industry growth? Let’s look at the policy contrasts and friction Germany experiences in the EU framework.

China’s Bold EV Policy Framework

China’s government has adopted highly proactive and centralized policies to boost EV adoption:

Massive Subsidies & Incentives: Despite scaling down recently, China has historically offered generous purchase subsidies for EV buyers, lowering upfront costs.
Manufacturing Support: State support for EV manufacturers, including easier access to land, funding, and infrastructure, fuels rapid production growth.
Battery Supply Chain Control: China dominates battery raw material mining and refining, securing supply chain advantages.
Strict Emissions Regulations: Cities enforce low-emission zones and restrict internal combustion engines, pushing consumers toward EVs.
Charging Infrastructure Investment: Aggressive government-led rollout of charging stations ensures convenience for users.

These measures have made China the largest EV market globally, with EVs accounting for over 30% of new car sales in 2025.

Germany’s EV Policy Landscape & EU Friction

Germany is pushing EV growth but faces distinct challenges:

Incentives with a Focus on Premium EVs: Germany provides purchase bonuses but at lower levels than China, often favoring higher-income buyers and luxury EV brands.
Industrial Policy Constraints: EU competition laws limit direct state aid to manufacturers, reducing Germany’s ability to replicate China’s hands-on approach.
Battery Production Push: Germany is investing heavily in local battery gigafactories, but supply chain dependency on Asia remains.
EU Regulatory Complexity: EU-wide regulations and environmental standards require member states to align policies, limiting unilateral bold reforms.
Charging Infrastructure: Germany is expanding infrastructure but lags behind China’s pace.

EU Friction and Its Impact on Germany

The European Union’s regulatory framework creates friction for Germany’s EV ambitions:

State Aid Rules: The EU’s strict competition policies restrict direct subsidies and bailouts, making it difficult for Germany to provide the kind of aggressive support China offers.
Harmonized Standards: Uniform standards limit national deviations, forcing Germany to comply with collective EU decisions, sometimes slowing policy adaptation.
Internal Market Dynamics: Cross-border trade rules and environmental targets mean Germany must balance its industrial policy with EU-wide sustainability goals.

Conclusion:

China’s bold 60-day payment reform is reshaping the EV industry, setting a high benchmark for automaker payments and supply chain efficiency. Germany’s EV industry faces challenges in matching China’s aggressive policies due to EU regulations but can learn valuable lessons to strengthen its auto supply chain and accelerate EV growth. Staying updated on Chinese automakers’ payment rules and China news is crucial for global competitors.