The Chinese car brand Neta Auto may soon be a thing of the past. In January, 98 percent of sales disappeared. Over 1,700 employees will lose their jobs.
Electric car brand Neta Auto is facing bankruptcy after a remarkable sales collapse in February and extensive financial challenges.
The Chinese media writes that the company is already closing down its development department. This implies that employees have been offered money to resign.
It is reported that around 200 out of a total of approximately 1,700 employees have already resigned.
The negative situation has intensified after a sharp drop in sales. Data from China EV DataTracker shows that Neta saw a 98 percent drop in car sales in January 2024 compared to the same period the previous year.
This is reported by CarNewsChina .
In February, the company managed to sell just under 400 cars, which is such a small part of the huge Chinese market that it doesn't matter.
The figure represents a significant decrease compared to February 2023, when Neta Auto sold around 4,000 electric cars.
There has also been critical coverage of the company's electric cars. For example, at the beginning of the year, a woman reported that her less than two-year-old car had lost 90 percent of its range. Today, cars can only travel 40 kilometers on a single charge.
The economic difficulties have had major consequences for employees, who have experienced significant wage cuts.
Some employees are now reportedly only receiving minimum wage, and there are also reports that former employees who left the company as early as November 2023 have not yet received the pay they are entitled to.
At the same time, the company is in conflict with its suppliers. Neta Auto's headquarters in Shanghai has become a gathering place for protesting suppliers demanding payment for parts for electric cars.
Some of the angry suppliers have reportedly been sleeping in and around the headquarters in the hope of getting their money back.
According to CarNewsChina, the current problems are primarily due to a previous strategy that was continued by a now-fired CEO.
He prioritized B2B deals, which means sales directly to other companies, at the expense of sales to private consumers and other sales channels.
Founder Fang Yunzhou, who recently returned as CEO, is now working to save the company by focusing on selling profitable products and expanding into foreign markets.
However, it may be too late. According to estimates, the company's total debt could be as high as 10 billion yuan, which is equivalent to approximately 9.52 billion kroner.
As early as November last year, there was speculation that Neta was facing bankruptcy.
At that time, the company managed to secure an investment of around eight billion kroner, but this has apparently not been sufficient to stave off the negative development.
It is now unknown whether Neta will be able to raise additional capital or whether one of the Chinese electric car brands will soon go under.
