Neta Auto has resumed full salary payments at its Tongxiang factory in July, according to Chinese media outlet ITHome, in what could be an early sign of operational recovery as the electric vehicle maker undergoes bankruptcy reorganisation.
The brand, owned by Hozon New Energy Automobile Co., launched a pre-registration process for strategic investors on July 10 through Alibaba’s asset disposal platform. As of early August, 47 entities had reportedly expressed interest. Neta entered formal restructuring proceedings in June after months of cash flow shortages, unpaid wages dating back to November 2024, and workforce reductions of nearly 50%.
At its Tongxiang facility, employees previously received only partial or minimum wage payments. Staffing remains limited following layoffs, with remaining workers engaged in cleaning, supply organisation and equipment testing ahead of a possible production restart. Neta has also begun supporting its sales and service network with materials and funding to maintain partnerships.
The company’s annual sales have fallen sharply, from 152,000 vehicles in 2022 to 64,549 in 2024, with production halted after major suppliers, including battery maker CATL, suspended deliveries over unpaid debts. Reports indicate outstanding supplier obligations exceed 6 billion yuan ($833 million), while cumulative losses are over 18.3 billion yuan ($2.5 billion).
Several state-owned shareholders have reportedly pushed for leadership changes and other structural reforms, citing concerns over a debt ratio above 217% and past expansion plans. Hozon’s assets include about 233,345 square metres of industrial land in Tongxiang, production equipment, proprietary software, and the “Neta Auto” trademark, which are being marketed to potential investors.
In June, Neta removed signage from its Shanghai headquarters after its lease expired and has yet to disclose a new office location. The company’s future hinges on securing new capital, advancing restructuring plans, and implementing governance changes.
