Both companies have officially debunked recent rumours of Toyota acquiring Chinese electric vehicle startup Neta Auto, while new court filings suggest the EV maker might instead be heading toward bankruptcy proceedings after months of financial struggles.
Toyota firmly denies acquisition rumours
Toyota China has explicitly rejected speculation about a potential takeover of Neta Auto. Xu Yiming, Head of Brand Communication at Toyota Motor (China) Investment Co., Ltd., responded clearly when contacted: “We have never heard of this matter and ask for help in clarifying this rumour.”
Additional media outlets that contacted Neta Auto report that the company has similarly confirmed that these acquisition rumors are false.
In March 2025, numerous suppliers visited Neta Auto’s Shanghai headquarters seeking payment solutions, prompting the company to organise a supplier conference focused on debt restructuring. On March 25, Neta announced it had reached debt-to-equity agreements with 134 core suppliers totalling over 2 billion yuan (285 million USD). This plan received positive responses from leading suppliers, including CATL, Gotion High-Tech, and others.
Failed financing efforts
Neta has been actively seeking new funding to address its operational difficulties. On January 24, 2025, the company held a shareholder communication meeting to discuss its Series E financing round. It plans to raise approximately 4-4.5 billion yuan (570-640 million USD), with the lead investor contributing about 3 billion yuan (430 million USD).
According to the company’s roadmap, after resolving debt issues, the lead investor’s 3 billion yuan was scheduled to arrive in April, primarily to restore production and fund future development fully. However, sources within Neta Auto confirm that as of mid-May, these funds have still not materialised.
A bankruptcy case was filed against Neta’s parent company
In the latest development, court records from May 13, 2025, reveal that Hozon New Energy Automobile Co., Ltd.—Neta Auto’s parent company—is now facing a bankruptcy review case. According to the “National Enterprise Bankruptcy Information Disclosure Platform“, Shanghai Yuxing Advertising Co., Ltd. filed the case and is being processed by the Intermediate People’s Court of Jiaxing City in Zhejiang Province.
China’s bankruptcy reorganisation process
Under Chinese bankruptcy law, the process typically begins with a pre-reorganisation application or a formal bankruptcy filing. Once a creditor files for bankruptcy liquidation, the court must notify the debtor company within five days.
The debtor then has seven days to raise any objections to the filing. If reorganisation proceeds, the debtor or appointed administrator must submit a draft of the reorganisation plan to the court and the creditor meetings within six months of the court’s ruling to initiate the reorganisation.
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