Neta, an electric vehicle (EV) brand under Hozon Auto, appears to be facing mounting challenges, as reported by Chinese media and Electrive. These difficulties span from declining sales to halted production, financial instability, and reduced social media activity by the company’s leadership.

Key Issues Highlighted:

• Declining Sales Figures:
  • October deliveries are estimated at only 4,500 vehicles, marking a 40% drop compared to September.
  • Cumulative deliveries from January to September totalled 53,853 vehicles, making it improbable for Neta to achieve its ambitious 200,000-unit annual target.

• Production Halts and Workforce Issues:
  • Production at Neta’s Tongxiang factory in Zhejiang, which mainly manufactures the Neta L electric SUV, has reportedly been suspended for weeks.
  • Employee salaries have been cut or delayed, raising concerns about workforce morale and stability.
  • Suppliers are allegedly owed payments, further straining operational continuity.

• Delivery Challenges:
  • The newly launched Neta S Hunting estate has experienced delivery delays, particularly for certain trim levels, impacting customer satisfaction and brand reputation.

• CEO’s Social Media Silence:
  • Neta CEO Zhang Yong has not posted on Weibo or TikTok since October 14, a stark contrast to his previous active online presence. This absence has raised speculation about internal struggles within the company.
• Financial Troubles:
  • Parent company Hozon Auto has recorded three consecutive years of losses, exceeding $900 million annually in 2022 and 2023. This financial strain casts doubt on Hozon’s ability or willingness to provide further financial support to Neta.

• Market Uncertainty:
  • Neta’s troubles come at a time when competition in the EV market is intensifying, and companies face increasing pressure to maintain profitability and meet delivery targets.

Industry Implications:

If Neta’s challenges persist, it could face a significant loss of market share in China’s competitive EV sector. Additionally, these setbacks may impact its ability to expand internationally, a strategy many Chinese EV makers have adopted to mitigate domestic pressures.

For customers, suppliers, and stakeholders, the uncertainty around Neta’s future underscores the importance of monitoring how the company addresses its financial and operational challenges in the coming months.