NETA Auto’s parent company, Zhejiang Hozon New Energy Automobile, officially filed for bankruptcy last 19 June. According to one of China’s largest news, CCTV, the company was sued by a creditor for debt and liabilities amounting to RMB 5.3 million (AUD 1.14 million) and RMB 1.4 billion (AUD 215 million) respectively.
The creditor filing for NETA’s bankruptcy petition is Shanghai Yuxing Advertising Co. through the Intermediate People’s Court of Jiaxing. According to Yuxing, NETA’s unpaid debts cover services rendered by the agency in 2022-2023, including test drives and marketing promotions.
NETA’S DOWNWARD SLOPE
Recent times have not been kind to NETA as showrooms in Shanghai have closed down, resulting in employee protests over unpaid salaries since 2024. In May, a Chinese netizen caught a sight of the removal of the company’s logo on its headquarters.
At the centre of this crisis is chairman and CEO, Fang Yunzhou who founded the company in 2014. Fang is under fire for his management of Hozon’s finances and overall strategy, disclosing losses of RMB 18.3 billion (AUD 3.9 billion) and a debt ratio of 217 per cent. These numbers have earned the ire of critics, who are also the company’s shareholders.
These shareholders are government-backed creditors who find issue with Fang’s prioritisation of expansion and the Southeast Asian market. While Fang focuses on an aggressive overseas expansion and making profit by 2026, his creditors want to shift efforts towards ensuring long-term stability for the company.
Thus far, none of Fang’s goals have been achieved and his company’s backers are pushing for his resignation.
NETA’s financial missteps have resulted in a halt in operations. Its battery provider, CATL, has stopped its deliveries along with NETA’s other partners. Since, manufacturing in China has come to a complete halt, causing a delay in its supply chain.
NETA IN SOUTHEAST ASIA
While troubles at home brew, NETA’s efforts in Southeast Asia have taken a toll. The company also closed shop in Singapore, only 3 months after its debut in January 2025. In Thailand, NETA faced a shortage of spare parts, vastly delaying insurance claims up to 10 months. Dealerships are also closing with showrooms being cut by a third, from 60 open to only 40 currently.
Meanwhile on Facebook, NETA Thailand’s general manager Sun Baolong announced a complete internal restructure under court supervision. NETA revealed plans to attract more investors, upstart production, and boost research and development and their international expansion. Though these plans seem positive, a domestic supplier expressed doubt, citing layoffs and losses at the expense of NETA’s dealers and suppliers.
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