Japanese auto giant Toyota is reported to have put forward an acquisition of Neta Auto which is a Chinese electric vehicle (EV) start up at present in very tough financial health. Although Toyota has not gone on record to confirm the report which we have heard from within the industry – that this may be a step in Toyota’s larger plan to expand it’s EV which is the world’s largest growing segment in China.
The report, first published by Car News China on Tuesday, May 13, 2025, stated that the acquisition, if it goes ahead, could provide much-needed capital for Neta to continue operations.
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Neta Auto Faces Financial Crisis
Neta Auto, based in Zhejiang, Shanghai, has struggled to maintain operations due to a lack of funding. The company reportedly halted vehicle production, laid off hundreds of workers, and failed to secure enough support in its latest funding round.
In February 2025, Neta launched an E-round funding campaign aiming to raise 4–4.5 billion yuan, but investors from BRICS-backed sources could only commit around 3 billion yuan — and even that was conditional on production resuming.
Although Neta opened its Tongxiang factory in January 2025, production never restarted due to a shortage of spare parts. Several key investors pulled out or canceled agreements, causing a significant drop in the company’s valuation.
Valuation Drops and Debt Pile Up
In 2023, Neta was valued at 42.3 billion yuan (USD 5.8 billion). But by 2025, a proposed deal to sell 50% of the company for only 3 billion yuan (USD 414 million) slashed its valuation by over 80%, down to just 6 billion yuan (USD 828 million).
Neta has suffered cumulative losses of 18.3 billion yuan in the past three years and reportedly owes suppliers around 6 billion yuan. To avoid bankruptcy, Neta has offered to convert 70% of supplier debts into equity, while paying the rest in installments. However, without new investment, the company warns that it may default on wages and social insurance.
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Potential Legal Trouble in Thailand
In addition to its financial crisis, Neta may also face fines in Thailand, where it previously received subsidies of up to USD 4,100 per vehicle. To keep those incentives, Neta must start local production in Thailand by the end of 2025. If it fails, it may be required to repay the subsidies, along with penalties and tax relief received.
Toyota’s Strategic Interest
If Toyota goes through with the purchase we see that they may gain greatly from the incorporation of Neta’s EV tech, manufacturing infrastructure, and local market knowledge. This would put Toyota ahead of the very competitive local action in China’s EV segment.
However, when asked about the acquisition rumors, Toyota’s Communications Director in China, Xu Yiming, said he had no knowledge of such a deal.
Sales Plunge Highlights Neta’s Struggles
Neta sold 64,500 vehicles in 2024, but in January 2025, that number fell drastically to just 110 units — a nearly 98% drop. The brand has also received criticism for using outdated technology and making exaggerated performance claims.
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Conclusion
Although Toyota has not officially confirmed the acquisition, its potential interest in Neta Auto highlights how global carmakers are seeking rapid expansion in China’s EV market. For Neta, a deal with Toyota could be a lifeline — but time is running out.
