Manufacturing expected to recommence under Neta's guidance
Neta Auto, a Chinese electric vehicle manufacturer, has restarted production at its Tongxiang factory in China, marking an initial recovery phase after bankruptcy reorganization proceedings began in June 2025. According to local media reports, employees at the facility are receiving their full salaries for July 2025, following months of unpaid or partial wages dating back to November 2024.
The company is actively restructuring, with the involvement of 47 potential investors who have expressed interest in injecting capital into the automaker by mid-September 2025. This strong potential capital infusion could help address debts exceeding CNY 6 billion (~RM 3.5 billion).
Neta's parent company, Hozon New Energy, is leading the restructuring and seeking strategic investors through Alibaba’s platform. The company has opened an investor recruitment channel on an asset trading platform under Alibaba, requiring a deposit of CNY 50 million (~USD 6.9 million) per participant.
The resumption of production comes after Neta underwent significant changes. In November 2021, the company initiated large-scale layoffs due to financial difficulties. The company had also experienced severe cash flow issues and nearly halved its workforce before entering bankruptcy proceedings. Large supplier debts were a major factor forcing halted production.
In an attempt to address these debts, Neta offered suppliers a plan whereby 70 percent of their claims would be converted into equity in the parent company Hozon Auto, with the remaining 30 percent of claims to be treated as interest-free debt. However, this debt-for-equity swap plan failed in May 2022, leaving several hundred million yuan in debt unresolved.
As part of its restructuring efforts, Neta is retaining dealer outlets and communicating with stores willing to continue serving the brand to provide material and financial support. The company is also reportedly downsizing directly operated stores.
The exact details of the bankruptcy restructuring process Neta is currently undergoing remain unclear. However, the resumption of production and full salary payments to employees signal a cautiously optimistic turnaround for Neta Auto, contingent on successful restructuring outcomes, continued investor funding, and operational stabilization.
References: [1] Jiemian, March 25, 2022. [2] 21jingji, May 30, 2022. [4] Jiemian, undated. [5] 21jingji, undated.
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