Recently, a video circulated online showed over 20 authorized dealers of Nezha Auto protesting at the entrance of the Nezha Auto factory in Tongxiang. They demanded a direct response from Chairman Fang Yunzhu regarding their concerns. In the protest video, the dealers made three demands: compensation for operational losses from September 2024 to the present, an advance on operational costs for May to July 2025, and a full refund of all rebates and subsidies for delayed payments before May 11. They also urged for the quick restoration of the after-sales service system. On April 14, a reporter from the Daily Economic News sought confirmation from Nezha Auto about the dealers’ protest. The company only replied that they were “in talks with the dealer representatives.” On the same day, news about former CEO Zhang Yong’s departure to the UK gained attention. In the afternoon, Zhang responded on his WeChat Moments, thanking everyone for their concern and clarifying that he still serves as an advisor to Nezha Auto, working on financing for the company. Nezha Auto has not yet received 3 billion in financing. The Tongxiang factory has resumed limited operations. Currently, Nezha Auto operates three factories in China, located in Tongxiang, Nanning, and Yichun. Each factory has distinct responsibilities: the Tongxiang factory focuses on complete vehicle production, the Yichun factory handles parts manufacturing, and the Nanning factory is responsible for exporting KD components. Nezha Auto operates three factories in China. The Tongxiang factory resumed limited operations in January. It focuses on delivering vehicles from last year’s orders. The company runs normally, but full production recovery awaits financing. A company representative confirmed this. On January 24, Nezha Auto held a shareholder meeting. They discussed the ongoing Series E financing, aiming to raise about 4 to 4.5 billion yuan. The lead investor plans to contribute around 3 billion yuan. However, this funding depends on Nezha Auto providing a reasonable solution for its existing debts. On March 19, Nezha Auto organized a supplier meeting to address debt issues. On March 25, they announced agreements with 134 core suppliers for over 2 billion yuan in debt-to-equity swaps. Major suppliers like CATL and Guoxuan High-Tech supported this plan. Once Nezha Auto resolves its debt issues, they expect the 3 billion yuan to arrive in April. This funding will help restore full production and support future growth. However, insiders revealed that the financing has not yet arrived. Tianyancha shows that Nezha Auto’s parent company, Hozon New Energy Automobile Co., Ltd., received seven new consumption restriction orders in 2025. Six of these stemmed from disputes with suppliers over sales contracts.
Since 2025, Hezhong New Energy has added 55 equity freezes and 34 enforcement records. The total amount executed against Hezhong New Energy exceeds 165 million yuan. Outside of the dealer issues, reports surfaced that the Nezha Auto Shanghai team plans to move entirely to Tongxiang. A staff member at Nezha Auto’s Shanghai headquarters said, “I have not received any notice about leaving Shanghai.” Years of losses have put Nezha Auto in a difficult position. In early 2024, signs of a cash flow crisis appeared. By the end of 2023, Nezha Auto’s short-term loans reached 4.317 billion yuan, while cash dropped to 2.837 billion yuan, insufficient to cover the loans. On June 26 last year, Nezha Auto submitted its prospectus to the Hong Kong Stock Exchange. It reported losses of about 4.84 billion yuan, 6.666 billion yuan, and 6.867 billion yuan from 2021 to 2023, totaling over 18 billion yuan in three years. Continuous losses increased Nezha Auto’s financial pressure. By October last year, reports of mass layoffs, salary cuts, unpaid supplier debts, and production halts emerged due to operational difficulties. At the end of October 2024, news indicated that Nezha Auto began implementing salary cuts for all R&D staff. The following month, Nezha Auto significantly reduced and consolidated its first and second-tier departments, optimizing management levels and enhancing the use of new AI tools. By December 2024, due to strategic adjustments, Zhang Yong stepped down as CEO and became a company advisor. Nezha Auto founder Fang Yunzhu took over as CEO. Fang Yunzhu issued a letter to all employees, stating, “As the founder, I bear primary responsibility and sincerely apologize to everyone.” To cut costs, Nezha Auto decided at the end of 2024 to close some direct-operated stores while retaining dealer stores. After channel adjustments, Nezha Auto kept only a few direct-operated stores in key cities.
In January this year, Nezha Auto announced that it made internal adjustments over the past three months during a turbulent period. The company reduced monthly operating costs by over 70%. A representative from Nezha Auto explained that the cost reduction and efficiency improvement efforts focus on four areas: optimizing staff, adjusting marketing channels by reducing offline experience stores, cutting smart driving investments by shifting from in-house development to external partnerships, and producing in overseas markets through joint ventures instead of wholly-owned factories. Recently, Nezha Auto’s co-president, Zhang Xiaodong, stated at the 2025 Thailand Dealer Conference that the company’s self-rescue measures are progressing actively and effectively. The debt-to-equity swap with suppliers has shown clear results, laying an important foundation for attracting external investment. According to Fang Yunzhu’s plan, Nezha Auto aims to achieve an IPO while ensuring that sales will be split evenly between domestic and international markets in the next 2-3 years. The company targets a positive overall gross margin by 2025 and overall profitability by 2026.