On May 13, 2025, it was reported that Hezhong New Energy Vehicles Co., Ltd. (parent company of Nezha Automobile) filed for bankruptcy, with Shanghai Yuxing Advertising Co., Ltd. as the applicant.
According to the information from the National Corporate Bankruptcy and Reorganization Cases website of China on May 13th, a new bankruptcy review case was filed by Hezhong New Energy Vehicles Co., Ltd., a related company that produces Nezha automobiles, with the applicant being Shanghai Yuxing Advertising Co., processed by the Intermediate People’s Court of Jiaxing City, Zhejiang Province.
Due to funding chain issues and sluggish car sales, reports of employee layoffs at Nezha Automobile have been circulating in the market.
Financial reports on May 13th indicated that on March 18th, there were rumors that Nezha Automobile had begun dissolving its research and development team. Subsequently, Nezha Automobile officially responded stating that rumors of the dissolution of the R&D team were false, and the company is currently optimizing its organization and processes to reduce costs and increase efficiency.
On April 14th, several Chinese media outlets reported that some Nezha Automobile dealers had paid for cars but had not received them for a long time, resulting in rights protection issues. Reports also emerged about the headquarters of Nezha being “surrounded” by suppliers.
Financial reports indicate that since 2017, Hezhong Automobile has completed 10 rounds of financing, totaling 22.844 billion yuan. However, the pace at which Nezha Automobile was burning through money was alarming. From 2021 to 2023, Nezha Automobile’s operating income was 5.09 billion yuan, 13.05 billion yuan, and 13.55 billion yuan respectively, with gross profits of -1.748 billion yuan, -2.939 billion yuan, and -2.014 billion yuan, and gross profit margins of -34.4%, -22.5%, and -14.9% respectively. Moreover, the company incurred net losses of 4.84 billion yuan, 6.66 billion yuan, and 6.867 billion yuan from 2021 to 2023, with accumulated net losses exceeding 18.3 billion yuan.
On April 25th, the Zhejiang Provincial Taxation Bureau of the State Administration of Taxation of China released a tax arrears notice showing that Hezhong New Energy Vehicles Co., Ltd. owed over 2.15 million yuan in taxes.
The plight of Nezha Automobile reflects the current situation of the electric vehicle industry in China. Due to the impetus provided by the Chinese government, there has been a rush to develop electric vehicle manufacturing across the country, leading to excessive electric vehicle production capacity. Apart from large-scale dumping overseas, many electric vehicle companies have been forced to withdraw.
According to data compiled by Car Quality Net, from 2020 to January 2025, 35 automotive brands have officially exited the Chinese market, gone bankrupt, restructured, or ceased automobile operations, including Jia, Weimar, Tianji, Aichi, Gaohe, Bitauto, Boren, Youxia, Yundo, Ziyou, Redin, Hanlong, Cylin, Qiantu, Hengchi, Qidian, Ziyoujia, Baoneng, and Xintec, among other new car forces.
Public records show that Hezhong New Energy Vehicles Co., Ltd. was established in October 2014 with a registered capital of approximately 2.837 billion yuan. Its business scope includes the design, development, production, sales, and related consulting services of new energy vehicles and components.