Toyota Plans to Acquire Neta Auto to Boost China EV Push – Report

In the bid to accelerate its EV push in China, Toyota reportedly considered the acquisition of the troubling Chinese EV marque, Neta Auto.

It is no secret that Toyota is ramping up its EV push in China, which by far is the world’s largest market for NEVs. Besides planning to launch several new products, the Japanese automotive giant is also reportedly considering acquiring a new EV partner in China, in the form of the struggling Neta Auto.

As per CarNewsChina’s report, this purported acquisition will not only help to strengthen Toyota’s EV plans in China but also offer a financial lifeline to Neta Auto. In its latest product roadmap for China, the Japanese automaker plans to produce 3 million cars annually by the end of the decade,  while having 15 in-house-developed EV models specifically for the Chinese market by 2027.

Founded in 2014 by Hozon New Energy Auto, Neta has been in fiscal crisis since mid-2024, with the list of troubles including production halts and massive layoffs, which now left the automaker scrambling for external funding. To make things worse, Neta previously disclosed a failed E-round financing plan earlier this year, involving a sum of over CNY 4 billion (RM2.4 billion).

The decline in Neta’s value started back in 2023, when the automaker was initially valued at CNY 42.3 billion (RM25.4 billion) after receiving a CNY 1.53 billion (RM919 million) investment from the Tongxiang government entity. Now, the automaker is only valued at CNY 6 billion (RM3.6 billion), which is a significant 80% drop in just two years’ time.

The same decline can also be seen in Neta’s profit margins, where it has recorded a cumulative loss of up to CNY 18.3 billion (RM10.9 billion) in over three years, while a total of CNY 6 billion (RM3.6 billion) is still owed to their suppliers. To mitigate this financial bleeding, Neta Auto has initially proposed converting 70% of its supplier debts into equity while paying the rest in installments.

Things are quite bleak for Neta in its overseas operations, as the automaker could potentially face financial penalties in Thailand for failing to meet the local production target by 2025, which grants them up to THB 150,000 (RM19,475) of subsidies per vehicle. Failing to hit this target could force Neta to repay all the subsidies, interests, and tax breaks granted by the Thai government.

Despite this turmoil, Neta still retains some technological and market value, particularly in the electric vehicle sector. Should the deal with Toyota proceed, the Japanese automaker could leverage Neta’s technological assets and local knowledge to propel its EV push in China.

Toyota bZ3 EV sedan (left) & Toyota bZ3X EV crossover (right)

And just like any other foreign brand in China, Toyota is also no stranger to partnering with local Chinese automakers in developing and manufacturing their models specifically for the domestic market. Some key Toyota EVs like the new bZ3X and the bZ3 are borne out of Toyota’s collaboration with GAC Motor, so we can expect to see the same business models apply to its potential partnership with Neta.

Source: CarNewsChina, IT Home