Japanese automotive manufacturer Toyota is reportedly exploring the possibility of acquiring Neta Auto, a Chinese electric vehicle company facing severe financial distress, reported by Car News China. The potential deal, though not confirmed by Toyota, was highlighted in a report by Kuai Technology on 12 May, suggesting that such a move could serve to strengthen Toyota’s electric vehicle strategy in China, the world’s most competitive EV market.
Neta Auto, operated by Hozon New Energy Auto and founded in 2014, has been in crisis since the middle of 2024. The company halted production and implemented mass layoffs, while simultaneously scrambling to secure outside investment. In February this year, a much-anticipated Series E financing round failed. This round was projected to raise between 4 billion and 4.5 billion yuan (approximately USD 552–621 million), with the bulk of funding—3 billion yuan (USD 414 million)—expected from a lead investor associated with a BRICS country fund. However, the investment was conditional upon the company restarting production and attracting additional matching funds, neither of which came to fruition, prompting the investor to withdraw and causing the financing effort to collapse.
Although Neta attempted to restart operations by briefly reopening its Tongxiang facility in January, a shortage of essential components prevented production from resuming. This setback had a domino effect, undermining investor confidence and leading to a dramatic decline in the company’s valuation.
