Chinese electric vehicle startup Neta Auto is facing mounting challenges after an advertising firm filed for bankruptcy proceedings against its parent company, in the latest blow to the former EV darling, which has been trying to regain investor confidence following unpaid debt, mass layoffs, and tales of factories lying idle.
Neta’s financial woes are rapidly approaching the critical stage. The company, already backed by multiple Chinese regional authorities and a number of prominent investors, has had difficulties securing new investors, with unpaid debts totalling nearly RMB 10 billion ($1.4 billion), according to a recent report by Chinese financial media outlet Caixin. The news comes just three years after Neta was seen as a bright spot in the EV market with annual deliveries of more than 152,000 vehicles in 2022, beating the figures of a slew of fellow companies including NIO, Xpeng Motors, and Li Auto – China’s US-listed EV trio.
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Neta is not the first and won’t be the last Chinese EV maker with money problems. However, it appears to be a clear example of how vague strategy and poor management could see smaller EV makers lose ground to bigger auto rivals in a brutally competitive landscape. Below, TechNode summarizes the key moments from Neta’s attempt to restructure its business, find new investment money, and expand its overseas markets since last year.
April 15, 2024 – Neta receives government funds
Neta’s parent company Hozon signed a term sheet for an investment deal of no less than RMB 5 billion with three existing backers, namely Tongxiang State-Owned Capital Investment and Operation Co., Ltd., Yichun Jinhe Equity Investment Co., Ltd., and Nanning Minsheng New Energy Industry Investment Partnership. This came a month after Neta announced a $25.6 million subsidy from the Hong Kong government.
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June 26, 2024 – Neta files for HK IPO
China’s Hozon Auto filed its prospectus for an initial public offering with Hong Kong securities regulators, and a previous Reuters report said the company was targeting a $1 billion fundraising through the offering. The prospectus was however deemed invalid in late December. It posted a RMB 4.84 billion loss for 2023 after losing RMB 6.7 billion a year earlier.
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December 6, 2024 – Neta CEO quits amid layoffs
Neta confirmed the departure of co-founder and chief executive Zhang Yong who had been with the company for six years. In an internal letter sent to employees that was revealed by various Chinese media outlets, chairman Fang Yunzhou also announced a series of restructuring and debt reduction initiatives, the decision to direct more effort to overseas markets, and a break-even goal of 2026.
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March 19, 2025 – Neta discusses debt/equity swap
Neta provided a restructuring proposal to its suppliers that would allow them to swap their debt for a stake in the company. More than RMB 2 billion of the debt was swapped into Neta stakes by over 100 parts suppliers including battery makers CATL and Gotion High-Tech, major players showing support for Neta in its quest to resume business operations, Neta told China’s Xinhua News Agency.
March 23, 2025 – Neta gets $306 million in credit
Neta announced in Bangkok that it had secured a credit line of 10 billion Thai baht ($306 million) from a local financial entity. The company had also reached a deal with contract manufacturer Bangchan General Assembly Co., Ltd. as part of a plan to initiate production of its Neta X compact crossover in Thailand in July. Neta was an early entrant in the country with a cohort of more than 25,000 vehicle owners.
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May 13, 2025 – Neta faces bankruptcy review
Shanghai Yuxing Advertising Co., Ltd., a company making print materials for auto shows, filed for bankruptcy proceedings against Hozon New Energy Automobile Co., Ltd., Neta’s parent company. The Jiaxing Intermediate People’s Court in the eastern Chinese province of Zhejiang accepted the case, according to court filings. Seeking a review to assess whether the debtor meets the legal conditions for bankruptcy, the creditor said it was owed over RMB 1 million.
