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From the evening of 5th January, the official website of Neta Auto—a leading NEV brand in China—became inaccessible.
This was compounded by online complaints from Neta customers, whose subscriptions for the in-car app had expired and could not be renewed, while the customer hotline was unreachable.
The subsequent online commentary about Neta is reminiscent of the recent downfall of another EV start-up, Jiyue (极越) in December. Backed by Geely and Baidu, Jiyue abruptly shut down last month in a financial crisis involving unpaid employees, department closures, and supply chain disruptions.
Rumours that Neta Auto is also facing financial difficulties are not new, and have been circulating since the end of last year. In October, employees revealed the company had been delaying salary payments, cutting wages, and laying off staff. The workforce shrank from 7,932 employees at the end of 2023 to around 5,000 by the end of 2024, with some departments experiencing layoffs of 50-60% in head count.
During that process, Neta CEO, Zhāng Yǒng 张勇 explained the situation with a well-known phrase:
It is necessary for every single person to feel the chill.
有必要把寒气传递到每一个人。 [3]
That "chill" (寒气) metaphor was famously used by Huawei founder, Rén Zhèngfēi 任正非 in 2022 when he shared his bleak predictions for his company, and the Chinese economy.
Founded in 2018, Neta is one of a number of fast-growing EV companies which entered the market at time. But it has fallen behind the three strongest EV Chinese brands—all of which have been featured in this newsletter—known collectively as "蔚小理"—NIO 蔚来, Xpeng 小鹏, and Li Auto 理想.
In 2022, Neta Auto achieved total annual sales of 152,100 units, making it the best selling EV car brand that year. However, Neta's sales declined in 2023, with a year-on-year drop of 16%, and it was the only EV maker to hit just 50% of its annual target that year.
Neta was one of the first Chinese EV companies to "go global" (出海), entering international markets in 2021, starting with Thailand. Since then, it has expanded to Southeast Asian and South American countries. Exports remained strong until 2023, with 17,687 units sold in the first half of that year, which represented a year-on-year increase of 154%, ranking first in export volume among NEV startups.
But as early as 2022, Neta’s then CEO, Zhang Yong joked of the challenges ahead for the EV sector with Lǐ Bīn 李斌, the founder of competitor, NIO:
NIO is in a difficult place, but at least they have some fame. We’ve been struggling all this time, and no one even knows us.
蔚来很惨，好歹也有名气，我们一路惨过来没人知道。[2]
More recently, media reports have criticised Neta's product line for lacking a clear focus as one of the reasons for its recent poor performance.
Initially, Neta targeted the budget market with the launch of the Neta U, a compact SUV starting at 139,800 yuan (around $21,400); and the even more affordable Neta V, a small SUV priced to compete with microcars at just 73,900 yuan (around $11,300). Both models performed well, especially the smaller Neta V, which sold nearly 120,000 units between 2020 and 2021.
Then Neta pivoted to the luxury market, introducing the Neta S, a coupe starting at 199,800 yuan (around $30,500), and the high-performance Neta GT, with top-tier models reaching over 340,000 yuan (around $52,000).
But sales of these premium models have struggled to gain momentum.
CEO Zhang Yong has acknowledged mistakes:
“There was no smooth transition between new and old products, leading to a disrupted rhythm; the pricing of the new products at launch was too high, and although it was adjusted in the second half of the year, the window of opportunity was already closed.”
新老产品切换时没有衔接好，节奏乱；新产品上市定价过高，下半年虽然调整到位，但丧失了先机。[2]
These internal struggles unfold just as China’s EV market faces unprecedented competition and consolidation.
Hé Péng 何鹏, the founder of Xpeng, captured the gravity of the situation:
"2024 is the first year that Chinese automotive brands enter into 'blood-sea' competition, marking the beginning of the elimination round.
In the next decade, only 7 Chinese automotive brands will remain."
2024年是中国汽车品牌进入‘血海’竞争的第一年，也就是淘汰赛的第一年。未来十年，中国汽车品牌只剩7家。[2]
So amid mounting internal challenges and broader industry-wide pressures, Neta announced that Zhang Yong would step down as CEO in December, with founder and chairman Fāng Yùnzhōu 方运舟 taking the helm.
Fang declared that Neta Auto would embark on a phase of “second entrepreneurship” (二次创业), a term commonly used in Chinese to signal a strategic relaunch.
Fang set three goals for the business:
Comprehensive reform and expansion into global markets; making the IPO a top priority; and striving for a positive overall gross margin by 2025 and profitability by 2026.
大刀阔斧改革，扩展全球市场；将IPO设为首要目标；力争2025年整体毛利率转正，2026年整体盈利。 [3]
The Chinese name of the Neta brand—Nézhā (哪吒)—is rooted in Chinese mythology, which is lost in translation.
Nézhā (哪吒) is a character in the classic Ming dynasty novel, The Investiture of the Gods (封神演义). A rebellious and fearless child deity, Nezha has a fiery spirit and the courage to challenge authority, even daring to confront heavenly beings.
The 2003 animated TV series, The Legend of Nezha (哪吒传奇), brought this timeless tale to life, following him as he battles evil while exploring themes of self-discovery, sacrifice, and destiny. The series became a cultural phenomenon in China, captivating audiences of all ages.
In 2019, the blockbuster animated film, Nezha: Birth of the Demon Child (哪吒之魔童降世), offered a modern reimagining of the myth, emphasising Nezha’s defiance of fate, leading to the popularity of the phrase, “be the master of one’s own fate" (我命由我不由天). The film shattered box office records in China, cementing Nezha as a cultural icon.
The discussions surrounding Neta Auto's recent troubles draws on these ancient and modern cultural references, which are lost on non-Chinese audiences. For instance, some have remarked that the brand has lost its "wind-and-fire wheels" (风火轮)—Nezha’s means of transport on his journey of self-sacrifice, rebirth, and ultimate triumph.
So, will Neta Auto's founder and newly appointed CEO be able to turn the business around and "be the master of his own fate," or has Neta truly lost its "wind-and-fire wheels"?
That’s what we’re exploring this week!
🎧 Member Podcast Preview: This week, we delve into language inspired by the mythological character Nézhā, including "wind-and-fire wheels" (风火轮) and the "battle to tame the seas" (闹海), uncovering what they mean in this modern context. We also explore idioms reflecting Neta Auto’s precarious situation: "on the edge" (命悬一线), “a near escape from death” (九死一生), and “a narrow escape” (绝处逢生). These phrases might just offer clues to Neta’s chances of survival—if you know where to look! Tune in at the 9-minute mark to master these expressions!
Favourite Five
1. 大逃杀 dà táo shā
fight to the death
2025年的车圈大逃杀，刚开年就已经有了动静 - The fight to the death in the automotive sector in 2025 is already happening at the beginning of the year. [1]
Note: This can also be translated as "Hunger Games"
2. 风火轮 fēng huǒ lún
wind-and-fire wheels
眼下，哪吒汽车已经没了「风火轮」 - At present, Neta Auto no longer has the "wind-and-fire wheels".
Note: a reference to Nezha who travels on "wind-and-fire wheels". In this context, it’s used to mean “Neta’s USP” which it has lost. We discuss more in the podcast.
3. 腥风血雨 xīng fēng xuè yǔ
bloody competition
从汽车行业发展史角度看，腥风血雨的大逃杀是产能出清的必然 - If you take a look at the history of the automotive industry, such “bloody competition” is inevitable in removing excessive capacity. [2]
More: read more about this phrase in the Sinica Phrase of the Week.
4. 提心吊胆 tí xīn diào dǎn
anxious, on edge
400电话也无法打通，大早上的就开始提心吊胆 - He was very worried in the morning, as even the 400 hotline couldn't be reached. [1]
More: we last discussed this when investors in China’s gaming sector became anxious when $80 billion was wiped from company value in early 2024 following sweeping policy changes.
5. 东一榔头西一棒槌 dōng yi láng tou xī yi bàng chui
scattered, unfocussed
哪吒汽车属于是生在了最好的年代，却一直没有找准自己的定位，导致东一榔头西一棒槌 - Neta Auto was born in the best era but it never found its position, which has led to a scattered approach. [1]
Consuming the Conversation
Useful words
6. 暴雷 bào léi
explode, financial failure
有关哪吒汽车疑似暴雷的消息就在不断发酵 - The rumour about Neta Auto's suspected sudden collapse is getting louder and louder. [1]
More: We discussed this when looking into the impact of a property company going bust, leaving a young couple homeless in Zhengzhou last year.
7. 惨遭 cǎn zāo
suffer, fall victim to
4月上市订单破3万辆，但又惨遭交付问题 - In April, the order volume exceeded 30,000, but it suffered delivery issues. [1]
8. 悼词 dào cí
eulogy
在哪吒汽车官网崩了后，太多人都急着给它写悼词 - After Neta Auto's website crashed, many people were in a hurry to write its eulogy. [2]
9. 没准 méi zhǔn
perhaps, maybe
多些向内求索、保持战略聚焦，没准就能绝处逢生 - If they take a closer look at what is happening inside the company and maintain their strategic focus, perhaps they can survive the crisis. [2]
Note: 没准 is a more colloquial way to say 说不定, while 也许 sounds more uncertain.
10. 突围 tū wéi
breakthrough
我希望它能挺过去——当然了，它要突围，得直面太多挑战 - I hope they can make it —of course, they have to face up to many challenges if they want to achieve a breakthrough. [2]
Related (which we discuss in the Member Podcast):
破局 pò jú – finding a breakthrough in a difficult situation.
挺过去 tǐng guò qù –persevere through tough times
11. 寒气 hán qì
chill
哪吒汽车在2023年开始蔓延的寒气，已经累积到逐步爆发的地步 - The chill that began spreading in Neta Auto in 2023 has accumulated to the point of an eruption. [3]
Three-character phrases
12. 杠杠的 gǎng gǎng de
top-notch, excellent
中配座椅加热，高配自动泊车，性价比在当时杠杠的 - You would get seat heating with standard configuration and automatic parking for the prenium version, which gave Neta model top-notch value for money. [1]
Note: a northeastern dialect word
13. 豁免牌 huò miǎn pái
get-out-of-jail-free card
