Neta allegedly fires entire R&D department

While the rumours in November were mainly about reduced salaries for employees and a pause in production at the main plant, an entire department is now to be affected by the job cuts. According to the Chinese medium Leiphone, the entire research and development team is to go. This week, 200 of the 1,700 employees in this area are said to have already accepted a corresponding severance package.

Although the engineers and product specialists may be employees with higher salaries leaving in the short term, in the long term a car manufacturer will find it very difficult to build modern and innovative cars without its own development department – especially in such a competitive market with many protagonists as in China.

However, the latest reports raise doubts as to whether Neta will be able to achieve a turnaround. According toChina EV DataTracker, fewer than 400 cars were sold in February 2025, 98 per cent fewer than in the previous year. The company is a long way from the highs of autumn 2022, when Neta was able to sell up to 18,000 cars per month.

In addition, CarNewsChina writes, citing unnamed sources, that Neta is said to have accumulated debts of up to 10 billion yuan (the equivalent of 1.27 billion euros). Although there are ongoing talks about financing with a foreign sovereign wealth fund, there are probably serious doubts about the company’s continued existence. At the company headquarters in Shanghai, representatives of suppliers have protested several times and demanded outstanding payments. Some are even said to have spent the night on the floor in the entrance area to avoid being turned away.

Another indication of the cash situation at Neta: the employees who opted for voluntary redundancy back in November 2024 have reportedly still not received the promised severance pay. In November, the salary of the remaining employees was already reduced by 50 per cent, and now apparently by another 50 per cent – meaning 75 per cent of the original salary from October 2024 has been cut.

Neta Auto was established as a mainstream NEV brand by Hozon Auto in 2018. However, the founder and long-standing CEO Fang Yunzhou is said to have focussed too much on B2B channels after early successes and neglected other areas. He recently announced a reorganisation with a focus on foreign markets (probably due to the tough competition in China) and profitable products. However, this step may have come too late for Neta – and the wave of consolidation among Chinese EV startups could continue.

carnewschina.com, weixin.qq.com (Leiphone report in Chinese)