Chinese electric car manufacturer Neta has been attempting to restructure itself through insolvency proceedings since June. After all, business has been anything but good recently: while Neta reached a peak in 2022 with 152,000 vehicles sold, sales fell to just under 88,000 vehicles in 2024. In the first quarter of 2025, it was only 1,215 units. On top of that, Neta was recently accused of inflating its sales figures.
Now, there seems to be improvement in sight: according to Chinese media reports, 47 companies have expressed interest in participating in a rescue of Neta. And: After a long period of problems with wage payments, which began last autumn, Neta is now reported to have paid salaries in full at its Tongxiang plant in July for the first time in a long time.
In addition, Neta is said to have begun reactivating its sales and service network and providing material and financial support to car dealers who are still willing to cooperate.
Prior to its insolvency, Neta carried out massive job cuts and ultimately had to cease production after key suppliers, including battery manufacturer CATL, stopped deliveries due to unpaid bills, as reported by Car News China. According to reports, unpaid supplier claims are said to exceed 6 billion yuan (approx. 720 million euros), while cumulative losses exceed 18.3 billion yuan (approx. 2.2 billion euros). Court records from March 2025 show that the accounts of the affiliated companies together amounted to less than 500 yuan (approx. 60 euros), illustrating the severity of the liquidity bottlenecks, according to the report.
As a result, Neta is said to have offered its suppliers a so-called ‘debt for equity’ swap in March, whereby 70 per cent of the claims were to be converted into shares in the parent company Hozon Auto, while the remaining 30 per cent of the claims were to be treated as interest-free debt. However, this deal is said to have failed in May, leading to insolvency in June.
Discount wars and zero-kilometre cars
The electric car market in China is considered overheated. The Chinese government has already called on manufacturers to moderate their price wars and criticised the practice of ‘zero-kilometre cars.’ This involves registering surplus new cars for a short period and then marketing them as used cars (some of them abroad).
carnewschina.com, cnevpost.com
