Editor’s Note: FlashPoint is our paid quick-strike column on market-moving China tech events. Today: CATL reported Rmb 21.2bn in third-quarter profit attributable to shareholders. Operating cash flow was about Rmb 1.4bn. Management says part of the gap was its own choice.
CATL, the Chinese battery maker that held 39.4% of the global EV battery market in the first eight months of 2026, reported third-quarter results on October 20. Operating cash flow for the quarter was about Rmb 1.4bn, against Rmb 22.0bn a year earlier. Neither cash figure appears in the filing, which leaves the quarterly line blank. Both are derived from the nine-month and half-year reports. Gross margin fell to 20.69%, from 23.93% in the first half, and the shares fell more than 11% in Shenzhen during trading the next day. I argued in July that CATL collects from both ends of its supply chain, with supplier credit doing more of the work as customer advances fell. This quarter it began closing the supplier end, and it says it chose to.
This piece builds on the July reading of how CATL collects from both ends of its supply chain, now tested against China’s push for faster supplier payments. If that is a useful lens, subscribe free and get every new analysis as it publishes.
The choice has a policy setting. In June 2025, an official at the Ministry of Industry and Information Technology, China’s industry regulator, said tougher competition had stretched payment terms down the EV supply chain. A regulation in force since June 1 that year generally requires large companies to pay small and medium-sized suppliers within 60 days of delivery. Seventeen carmakers then pledged 60 days. On June 29 this year, two industry groups for EV batteries and energy storage issued a supplier-payment code, which the ministry backed in public. It asks battery makers to pay small and medium-sized suppliers in cash and to start the payment clock at delivery or acceptance. Eleven leading battery makers responded, and CATL says it was among the first. Only the first step is a binding rule. The others are public commitments, made with the ministry watching. The paid section measures CATL’s shift, reviews the three July tests, and names the signals outside its filings that will show whether the change holds.