Neta Auto is gearing up to resume production, signaling a potential comeback for the troubled Chinese electric vehicle (EV) manufacturer currently undergoing bankruptcy restructuring. Reports from a local media outlet, Sina Auto, indicate that employees at Neta’s factory in Tongxiang, Zhejiang province, have received their full July salaries, hinting at the company’s readiness to restart production.
Prior to this development, Neta employees had only been receiving the minimum basic monthly wage of over RMB 2,000 yuan ($280), with some employees even getting just 50 percent of their regular monthly salaries. The company is also said to be in talks with stores willing to continue selling its brand in order to provide material and financial support.
The current workforce at Neta is reportedly busy cleaning up the factory, organizing materials, and testing equipment in preparation for the production restart. Despite being in bankruptcy restructuring, Neta has garnered interest from 47 potential investors willing to inject financial support to facilitate its production resumption.
The parent company of Neta, Hozon Auto, has initiated an investor recruitment channel on an asset trading platform under Alibaba and started accepting pre-registration materials since July 10. Hozon Auto, established in October 2014, received automobile production qualifications in April 2017.
In 2022, Neta delivered 152,073 vehicles, marking a significant 118.26 percent increase compared to the previous year. However, the company’s delivery performance has been lackluster in recent years, with no monthly delivery figures reported since October 2024. Neta faced financial difficulties last November, leading to widespread layoffs as a cost-cutting measure.
Reports from Jiemian in March revealed that Neta had struck a debt-for-equity swap agreement exceeding RMB 2 billion ($300 million) with 134 domestic core suppliers to pave the way for resuming production. The agreement involved converting 70 percent of suppliers’ claims into equity in the parent company, Hozon Auto, with the remaining 30 percent treated as interest-free debt.
Despite these efforts, a debt-for-equity swap plan reported by 21jingji in May failed to materialize fully, as suppliers were only willing to accept a scheme that addressed RMB 2 billion in debt, leaving a substantial amount unresolved. Neta is also restructuring its channel system, with plans to gradually shutter directly-managed stores while retaining dealer stores, as reported by local media.
With the influx of potential investors and efforts to stabilize its financial standing, Neta Auto is on the path to potentially reviving its operations and reestablishing its presence in the competitive EV market. ($1 = RMB 7.1845)
