Chinese electric vehicle (EV) manufacturer Neta has reportedly halted production and reduced employee salaries. According to CarNewsChina.com, the Neta brand, owned by Hozon Auto, has ceased production at its Zhejiang facility and cut worker salaries due to declining sales.
Neta’s CEO, Zhang Yong, has also reportedly stopped posting on the brand’s Weibo blog and TikTok account. Founded in 2018, Neta initially stood out as a key player in the EV sector, producing the affordable Neta V. Following this strategy, Neta outpaced competitors Li Auto, NIO, and XPeng in 2022, producing over 150,000 units. Later, Neta shifted to the premium segment, launching models like the Neta Aya (Neta V2), Neta X, Neta GT, Neta L, Neta S, and the Neta S Hunting model.
Challenges in the Chinese Market
Neta has faced challenges in China, particularly in selling its premium EV models, as indicated by its declining sales figures. Between January and September 2024, Neta delivered 53,853 EV units, less than 30% of its annual target. However, the company has not disclosed its October sales figures, breaking its usual practice of early monthly sales reporting. Industry insiders estimate that Neta supplied only 4,500 EV units in October, a 40% year-over-year decrease. Delays in accessories for the Neta S Hunting model and low demand for other models also contributed to the low sales.
Reports indicate that Neta’s main factory in Tongxiang, Zhejiang, which produces 200,000 EV units annually (mainly the Neta L crossover model), has shut down for half a month. In 2024, Neta also implemented salary cuts, with reports that some workers did not receive their full pay for September. Salary reductions of up to 30% have reportedly affected senior employees.
CEO Zhang Yong, once highly active on social media, has been absent since October 14. Hozon Auto, Neta’s parent company, suffered net losses of ¥4.84 billion ($676 million) in 2021, ¥6.67 billion ($930 million) in 2022, and ¥6.87 billion ($960 million) in 2023, leaving only ¥2.83 billion ($395 million) in cash reserves. In June, Hozon applied for listing on the Hong Kong Stock Exchange. Meanwhile, Neta has also expanded into Central Asia, Southeast Asia, Latin America, and South Africa.
