Neta Auto faces bankruptcy as Toyota denies acquisition rumours

SHANGHAI: Chinese electric vehicle (EV) maker Neta Auto is on the brink of bankruptcy after months of financial turmoil and failed rescue attempts, with speculation of a potential takeover by Toyota now firmly denied.

Neta, set up in 2014 by Hozon New Energy Auto, has been facing a cash crunch since mid-2024, halting production, laying off staff, and scrambling for external investment.

In February 2025, a planned E-round financing worth up to 4.5 billion yuan (RM2.7bil) collapsed when the lead investor, backed by a BRICS nation fund, withdrew after key conditions - resumption of production and matching investments - were unmet.

The company’s Tongxiang factory briefly reopened in January, but a parts shortage prevented any production restart, scuppering the deal and further eroding investor confidence.

Neta’s valuation has plummeted by 80% since 2023, with a proposed 50% stake in early 2025 valuing the firm at just 6 billion yuan (RM3.7bil).

Major early investors, including 360 Security Technology, have withdrawn support, and Neta has accumulated three-year losses of 18.3 billion yuan (RM11.2bil) and owes suppliers 6 billion yuan.

According to a carnewschina.com report, Toyota’s China division has rubbished any acquisition plans, stating, “We have never heard of this matter.”

With no rescue in sight, Neta faces mounting legal and financial challenges, including potential penalties in Thailand for missing production targets tied to government subsidies.

Neta Auto has operations in Malaysia and Carsifu is reaching out to its local management for comment. We will update this post if a reply is forthcoming.