Toyota is reportedly in discussions to acquire crisis-hit Chinese electric vehicle (EV) startup Neta Auto, as the Japanese automaker seeks to expand its presence in China’s fast-evolving electric mobility sector. The potential acquisition, first reported by Chinese outlet Kuai Technology and cited by CarNewsChina, remains unconfirmed, though it could signal Toyota’s intent to accelerate its local EV development amid intensifying competition from domestic manufacturers such as BYD and Nio.
While Toyota’s China spokesperson Xu Yiming denied knowledge of any such talks, a successful deal would mark a rare instance of a Japanese original equipment manufacturer acquiring a Chinese EV company. The move could provide Toyota with access to key local assets, including Neta’s production licences, supplier relationships, and market know-how—resources that would be instrumental in narrowing the gap with homegrown Chinese rivals.
See also: Toyota Explores Wholly Owned Factory in Shanghai, Emulating Tesla’s China Strategy
Founded in 2014 by Hozon New Energy Auto, Neta has faced mounting financial difficulties since mid-2024. Production shutdowns, workforce reductions, and a collapsed Series E funding round have compounded its troubles. In March 2025, reports emerged that the company had disbanded its entire R&D team amid ongoing financial turmoil. The startup had previously drawn interest from a BRICS-backed investor willing to inject 3 billion yuan (€386 million), contingent upon production resumption and matched funding—conditions Neta failed to meet.
Despite a temporary restart at its Tongxiang facility in January, operations ceased again due to persistent parts shortages. As of May 2025, Neta has amassed losses totaling 18.3 billion yuan (€2.36 billion) over three years and reportedly owes 6 billion yuan (€775 million) to suppliers. Efforts to restructure its debt—by converting 70% into equity—have so far failed to restore creditor confidence. The crisis also extends beyond China, with Neta facing possible penalties in Thailand for not meeting local EV production targets under a government subsidy scheme.
See also: Toyota’s Cheapest EV Yet? bZ3X SUV Launches in China from $15,150
If finalized, Toyota’s acquisition of Neta could provide the automaker with a faster route to deepen its EV footprint in China’s competitive landscape. For Neta, the deal may offer a vital financial and operational lifeline to avoid collapse, while for Toyota, it may represent a strategic pivot to secure relevance in the world’s largest EV market.
