Rumours suggest up to 70% of staff are being laid off as brand seemingly confirms a restructuring is underway.
Various reports coming out of Neta suggest the budget EV brand is facing financial difficulties with rumours of employee layoffs and production pauses muddying the picture.
Some publications are quoting an insider saying as many as 70 percent of staff have been laid off, while others suggest the figure isn’t as high but that numbers vary by department.
We reached out to Neta to try and confirm the earlier reports about a temporary closure of their main production facility in Tongxiang but the spokesperson claimed not to have heard anything about the factory at that time.
According to one source speaking to Cailian, a local media company, the brand did confirm an organisation restructuring was underway, and said that an all-employee equity incentive plan had launched as recently as October 29 to help encourage employees to make the business more focused via streamlining of teams and flattening management.
We had predicted Neta was the most likely brand to face such issues when September’s sales figures came through at just 10,118, marking a stagnant result in a month of almost universal gains for other brands. The brand has seemingly been stuck at around the 10,000 unit mark for all of the last two years and in October didn’t even release their monthly figures for the first time.
Just last month rumours emerged from within Yuanhang that the premium EV brand was laying off staff and, combined with the bankruptcy proceedings surrounding HiPhi and Evergrande earlier in the year, reinforce the challenges associated with making an EV brand profitable.
Neta’s EVs play at the budget end of the market but they’ve continued to launch new products throughout the year, including the Neta L and Neta S Hunting, the first car to sit on CATL’s skateboard chassis, seemingly without much success.
Although Chinese sales are down 12.13 percent year-on-year, Neta does sell models in many international markets, including Central and Southeast Asia and Latin America, and even have a production facility in Thailand that was opened just last year.
We don’t have any figures on those international sales, but we do know that losses at parent company Hozon Auto reached a new high of RMB 6.87 billion in 2023 with similar losses in 2022, and without enough investment it’s sadly not a sustainable business.
We’ll keep you posted on the latest developments as we get them. In the meantime, you can check out our reviews of the Neta S and Neta GT below.
