Neta Auto has reinstated full wage payments at its Tongxiang factory as of July 2025, suggesting the electric vehicle maker is making cautious strides towards stabilising operations amidst ongoing bankruptcy restructuring. The development comes after a prolonged period of financial distress that saw mass layoffs, suspended production, and months of unpaid employee salaries.
The update was disclosed by the court-appointed administrator overseeing the restructuring of Hozon New Energy, Neta’s parent company, on 4 August 2025. Hozon is currently in the process of soliciting strategic investors to support its revival, having formally entered bankruptcy reorganisation proceedings in June this year. To facilitate capital inflow, the company opened a pre-registration platform via Alibaba’s asset disposal site on 10 July. Since then, 47 interested parties have expressed formal interest, with potential investors required to place a 50 million yuan (around RM32,500,000) deposit by 15 September 2025.
The identities of the 47 entities that have expressed interest in investing in Hozon New Energy Automobile are not publicly disclosed.
Neta’s financial instability came to a head earlier in 2025, following months of liquidity problems that culminated in delayed salary payments dating back to November 2024. At its peak, the crisis saw the company halve its workforce, with factory staff reduced to receiving partial or minimum payments of just above 2,000 yuan. A viral video in early June captured the rising tensions as employees confronted Neta Chairman Fang Yunzhou at the firm’s Shanghai office, demanding their overdue wages.
Despite these challenges, Neta has begun reactivating its core operations. Workers at the Tongxiang plant—now operating with a skeletal crew following significant layoffs—have resumed activities such as cleaning the premises, inspecting equipment, and organising supplies, in what appears to be groundwork for a possible production restart. Furthermore, the company has renewed efforts to revitalise its national sales and service network by supplying resources and financial aid to its dealership partners still willing to maintain collaboration.
While these moves represent progress, Neta’s operational and financial obstacles remain considerable. Annual vehicle sales fell drastically from 152,000 units in 2022 to just 64,549 in 2024. Production lines were idled when major suppliers, including leading battery manufacturer CATL, ceased deliveries due to outstanding debts. Supplier liabilities are believed to exceed 6 billion yuan, while cumulative losses have surged past 18.3 billion yuan. In March 2025, court records showed that company accounts linked to Hozon New Energy collectively held less than 500 yuan—underscoring the severity of its liquidity crisis.
Internally, friction has emerged among Hozon’s shareholders, particularly state-owned investors, who have reportedly called for a leadership overhaul and broader structural reforms. Their concerns stem from the company’s debt ratio, which has soared beyond 217%, compounded by what they perceive as aggressive and poorly managed expansion strategies in prior years.
As of 1 May 2025, Hozon’s asset base remains substantial. It includes over 233,000 square metres of industrial land in Tongxiang, Zhejiang, as well as an array of vehicle production tools, including moulds, testing systems, and proprietary software. The firm also retains rights to the “Neta Auto” trademark. Hozon’s infrastructure investment spans two major production facilities in Jiangxi’s Yichun and Guangxi’s Nanning, and three component manufacturing plants located in Tongcheng, Fengtai, and Fengyang in Anhui. Internationally, Neta maintains CKD (completely knocked down) operations in Bangkok and Jakarta, with the Thai assembly plant beginning operations in 2024.
In a further indication of transition, Neta Auto vacated its Shanghai headquarters in June after the lease expired, removing signage from the premises. The company has yet to disclose the location of a new corporate base.
The resumption of full wages at the Tongxiang factory, while modest, is regarded as a symbolic step towards rebuilding trust among staff and partners. However, Neta Auto’s long-term recovery remains contingent on securing fresh investment, executing a successful restructuring plan, and implementing the governance reforms advocated by key shareholders. The coming months will determine whether these early efforts can translate into a sustainable revival for the embattled EV maker.
