Neta Faces Financial Crisis, Dismantles R&D Team in China

Neta is facing some financial difficulties in China, where it has reportedly dismantled its whole R&D team amid supplier protests.

It seems like Chinese automaker Neta is still in firefighting mode, with the financial difficulties it suffered since last year seeming to not have subsided. In the latest revelation from China, it was revealed that Neta is now dismantling its entire R&D team due to these escalating financial troubles.

According to reports from CarNewsChina and Leiphone, this move will involve Neta giving N+1 severance packages for employees who sign termination papers this week, where approximately 200 staff have already submitted their resignations. That is quite a huge chunk out of the total workforce of 1,700 personnel employed under Neta for its Chinese operations.

Besides the R&D team shutdown, Neta has also reportedly implemented several significant salary reductions, with remaining employees facing a 75% cut from their pre-October 2023 levels. CarNewsChina also reported that some of the departing staff are only receiving Shanghai’s minimum wage, while the promised compensation for those who left the company in Nov 2023 has not been paid until today.

In terms of sales, Neta has been in trouble since last year, with its January sales figure this year decreasing by 98% year-on-year. To make things worse, the automaker managed to sell less than 400 cars in Feb this year in China. In our local market, sales are equally slow with on 16 vehicles registered in Jan and Feb 2025 - 11 Neta V, 4 Neta X and one Neta GT.

To make things worse, Neta is also facing protests from its suppliers who demand overdue payments. Media reports indicate that suppliers have been gathering at Neta Auto’s Shanghai headquarters to demand payment, with some even sleeping on the floor of the building.

CarNewsChina’s report also mentioned that Neta insiders have attributed the crisis partly to the former CEO’s strategy, which heavily favoured B2B channels and neglected other areas. Brand founder Fang Yunzhou, who has now returned as CEO, has outlined reforms focusing on overseas markets and profitable products. However, sources suggest Neta’s debt could be as high as CNY 10 billion (RM6.123 billion), raising concerns about the company’s recovery despite ongoing financing talks with a foreign sovereign wealth fund.

UPDATE: Neta however has denied these claims on its Weibo page citing that the company is going through organizational and optimization process to cut cost and improve efficiency. 

Source: CarNewsChina, Leiphone