Is Chinese EV Maker Neta FINALLY Bankrupt?

Reports from China indicate that troubled EV brand Neta may finally be bankrupt.

Woes continue for troubled Chinese electric vehicle (EV) brand Neta Auto (Neta). Despite repeated denials about reportedly being in dire straits financially, it appears that the writing is on the wall for the brand founded and owned by Shanghai-based parent Hozon Auto (Hozon New Energy).

In a recent report by CarNewsChina citing TMTpost, Neta has commenced bankruptcy reorganisation proceedings effective June 12, 2025. Notably, the firm reportedly reached this stage following dramatic scenes that unfolded at its Shanghai headquarters recently.

One source claims that the brand has commenced bankruptcy reorganisation proceeding this week following dramatic row between employees and its chairman.

The latter saw a series of viral videos circulating Chinese internet showing disgruntled Neta employees confronting Neta chairman Fang Yunzhou for overdue wages. From the same videos, which were recorded by an employee, a Neta staff confirmed the brand entered bankruptcy reorganisation proceedings the following day.

Disgruntled employees demanding outstanding wages is the latest in a series of incidents that continue to shine light into various issues that rose in recent months to plague the brand that was once regarded a ‘rising star’ amongst China’s vastly huge crop of EV and automaking start-ups.

The Neta brand's troubles aren't new. This is but the latest in a series of which spanning since 2024.

Prior to this, Neta faced cash flow disruptions, departing executives, as well as pressure from unpaid suppliers. 

On a higher level, Neta has also reportedly been subjected to multiple suits in court since 2024 stemming from broken capital chains and debt defaults. Additionally, it is believed many of the employees seen in the viral video mentioned have not received salaries since Nov last year – the same as when the automaker laid off over 2,900 workers.

Neta X launched sometime last year in Malaysia. This, plus the smaller Neta V (Aya) offering launched prior, are hardly seen on local roads too.

Moreover, despite legal victories, former employees are unable to collect their owed wages given that the company reportedly has insufficient assets to seize. One instance that reportedly happened in March this year when Chinese court orders froze less than RMB500 (approx. RM300) combined in two of Neta Auto’s affiliated company bank accounts.

Another instance of cash-flow issues reportedly came last month when a Shanghai advertising agency filed for bankruptcy review against parent firm Hozon New Energy alleging Neta Auto owed RMB5.31 million (approx. RM3.14 million) for advertising services and failed to fully honor a repayment agreement.

Though the firm responded by stating that this was a unilateral application by a supplier, it also reaffirmed then that it had not initiated bankruptcy proceedings still.

Locally, the brand took a blow to its image when the Neta V (Aya) pictured was awarded an dismal 0-Star score by ASEAN NCAP.

Closer to home, the brand’s image to a massive blow when the ASEAN NCAP awarded its Neta V (Aya) entry-level EV hatch model with a dismal 0-Star score rating – it has performed poorly in crash tests.

An operational restructuring towards a direct-to-consumer (D2C) sales model was announced, but little else has transpired further since.