New setbacks for China’s struggling EV manufacturer Neta: here’s the journey of how this former EV favorite reached this point.

      A Neta S electric sports sedan was exhibited in one of the company’s offline stores in Shanghai on Monday, August 21, 2023. Credit: TechNode/Jill Shen

      Chinese electric vehicle startup Neta Auto is encountering increasing difficulties following the bankruptcy filings by an advertising firm against its parent company. This represents another setback for the once-promising EV company, which has been striving to restore investor trust amid unpaid debts, extensive layoffs, and reports of idle factories. Neta's financial troubles are quickly nearing a critical point. Despite being supported by several Chinese regional authorities and notable investors, the company has struggled to attract new investments, with outstanding debts nearing RMB 10 billion ($1.4 billion), as reported by the Chinese financial media outlet Caixin. This news comes just a few years after Neta was regarded as a bright spot in the EV sector, achieving annual deliveries of over 152,000 vehicles in 2022, surpassing figures from rivals like NIO, Xpeng Motors, and Li Auto – the US-listed trio of China's EV market.

      Neta is not the first, nor will it be the last, Chinese EV manufacturer to face financial challenges. However, it exemplifies how unclear strategy and poor management can cause smaller EV manufacturers to fall behind larger automotive competitors in an intensely competitive environment. Below, TechNode outlines the significant events in Neta's efforts to restructure its business, secure new investments, and expand into international markets since the previous year.

      April 15, 2024 – Neta secures government funding

      Neta’s parent company, Hozon, signed a term sheet for an investment deal of at least RMB 5 billion with three existing investors: Tongxiang State-Owned Capital Investment and Operation Co., Ltd., Yichun Jinhe Equity Investment Co., Ltd., and Nanning Minsheng New Energy Industry Investment Partnership. This occurred a month after Neta announced a $25.6 million subsidy from the Hong Kong government.

      June 26, 2024 – Neta files for HK IPO

      China's Hozon Auto submitted its initial public offering prospectus to Hong Kong securities regulators, aiming to raise $1 billion through the offering, as per a prior Reuters report. However, the prospectus was deemed invalid by the end of December. The company incurred a loss of RMB 4.84 billion in 2023 after losing RMB 6.7 billion the previous year.

      December 6, 2024 – Neta CEO resigns amid layoffs

      Neta confirmed the resignation of co-founder and CEO Zhang Yong, who had been with the company for six years. In an internal letter revealed by various Chinese media, chairman Fang Yunzhou announced several restructuring and debt reduction measures, plans to focus more on international markets, and a goal to achieve break-even by 2026.

      March 19, 2025 – Neta discusses debt/equity swap

      Neta presented a restructuring proposal to its suppliers that would permit them to exchange their debts for equity in the company. Over RMB 2 billion of the debts were converted into Neta shares by more than 100 suppliers, including major battery manufacturers CATL and Gotion High-Tech, indicating significant support for Neta in its efforts to resume operations, as reported by China’s Xinhua News Agency.

      March 23, 2025 – Neta secures $306 million in credit

      Neta announced in Bangkok that it had obtained a credit line of 10 billion Thai baht ($306 million) from a local financial institution. The company also reached a deal with contract manufacturer Bangchan General Assembly Co., Ltd. to begin production of its Neta X compact crossover in Thailand in July. Neta was an early player in the local market, with over 25,000 vehicle owners.

      May 13, 2025 – Neta faces bankruptcy review

      Shanghai Yuxing Advertising Co., Ltd., a firm producing print materials for auto shows, initiated bankruptcy proceedings against Hozon New Energy Automobile Co., Ltd., Neta’s parent company. The Jiaxing Intermediate People’s Court in Zhejiang province accepted the case, according to court documents. The creditor, claiming to be owed over RMB 1 million, is seeking a review to determine if the debtor meets the legal criteria for bankruptcy.

      Jill Shen is a technology reporter based in Shanghai, covering Chinese mobility, autonomous vehicles, and electric cars. You can connect with her via email at [email protected] or follow her on Twitter at @jill_shen_sh.