I once thought that Nezha’s low-price strategy could replicate Tesla’s rise, but now it seems that this is more like another replica of Jia Yueting’s story.

In the past, Jia Yueting went to the United States to build cars, and later, Zhang Yong went to the UK to raise funds. Recently, media reports said that Zhang Yong, the former CEO of Nezha Auto, was revealed to have sparked heated discussions in the UK. Zhang Yong responded urgently in his circle of friends, saying: "I still serve as a consultant for Nezha Automobile and are rushing around to raise funds for the company." Corresponding to the runaway of the former CEO, there are many videos of representatives of Nezha Automobile dealers gathered in Tongxiang factory to collect debts.

Layouts, salary cuts, factory shutdowns... This new car-making force, which once stirred up the industry with the slogan of "making cars for the people", is now deeply trapped in the debt quagmire, and its fate is triggering the outside world to reflect collectively on the new energy vehicle industry - when capital fades, who is swimming naked?

Regarding rumors about layoffs, salary cuts, factory shutdowns, and other related rumors, a Nezha Auto customer service in Tongxiang City, Jiaxing City, Zhejiang Province, told Phoenix Finance: "The customer service department is currently operating normally, and the operation status of other departments is subject to official information. Since Zhang Yong left last year, the current CEO of Nezha Auto is Fang Yunzhou. As for whether the vehicle will be delivered on time, etc., it needs to be verified with the specific store."

01 From capital darling to "abandoned son": the cost of logo design is as high as 500 million yuan

Nezha Auto was founded in 2014. Its founder Fang Yunzhou is from Tongcheng, Anhui. He was once a veteran of Chery Automobile and the right-hand man of Chery Chairman Yin Tongyue. In 2014, Fang Yunzhou left Chery New Energy to establish Hezhong New Energy, which was later Nezha Automobile. Most of the veterans of Hezhong New Energy come from technical backgrounds. Zhang Yong, who once served as general marketing managers for Chery and BAIC, became the "selected person" of marketing promotion.

In 2021, when Zhou Hongyi, founder of 360 Group, invested in Nezha Automobile with 2.9 billion yuan, the company's valuation once surged to 25 billion yuan. At that time, capital's enthusiasm for the "sinking market" gave birth to the second-tier myth of new car-making forces: Nezha V series swept the online car-hailing market with a starting price of 70,000 yuan, and delivered volume soared to 150,000 vehicles in 2022, surpassing "Wei Xiaoli" to top the new forces.

Many people believe that as long as you sell 100,000 cars, you can turn around by scale effect. However, this optimism took a sharp turn for the worse in 2023. Nezha Auto's revenue in 2023 was 13.555 billion yuan, with a net loss of 6.867 billion yuan, and in 2021 and 2022, with a net loss of 4.84 billion yuan and 6.667 billion yuan respectively, with a cumulative loss of about 18.3 billion yuan in three years. With the decline in subsidies and price wars, Nezha Auto, which focuses on the B-end market, fell to -18%, and the delivery volume in 2023 fell by 16% year-on-year. Not only was it ranked last among the five mainstream new forces at that time, it was also the only new force with negative sales growth.

In 2024, Nezha Auto's sales plummeted by 40% year-on-year. Since 2025, Nezha Auto's overall operating situation has been bleak, with sales in January being only 110 units, and sales in February and March are not clearly disclosed. Now, facing pressures such as car manufacturing losses and high employee wage expenses, Nezha Automobile, which is still "not in a hurry to IPO" in 2023, puts its hope of financing and life-sustaining its life-long IPO on Hong Kong stocks.

In fact, Hezhong New Energy has raised 10 rounds of financing, with a financing amount of 22.8 billion yuan. Investment institutions include CATL, Hefei Hi-Tech, Tongxiang Finance Bureau, 360 Group, Huading Fund, etc., but the speed of car manufacturing is amazing. According to the International Insights Office, Zhang Yong, former CEO of Nezha Auto, once revealed that the design cost of Nezha Auto logo is as high as 500 million yuan, while the Xiaomi Auto logo, which is valued by Lei Jun, has a total cost of only 2 million yuan. According to the prospectus previously disclosed, Zhang Yong's total salary in 2023 is as high as 30.994 million yuan.

The mirror image with Nezha is Jia Yueting's Faraday Future (FF). The latter once made more than 40 billion yuan in money with the concept of "ecological anti-epidemic", but the mass-produced cars have not been delivered yet. The difference is that Jia Yueting relies on "painting cake" to maintain capital confidence, while Nezha's problem is more realistic: although the low-price strategy brings sales, it fails to build a moat.

02 The former "new forces" champion of car manufacturing has been in vain, and employees and suppliers have performed a debt collection drama

Nezha Auto is on the verge of collapse due to the owed wages of employees and suppliers.

According to Fang Yunzhou's words, Nezha Automobile, which has been starting a business for ten years, is standing at the intersection of the phoenix's nirvana. Faced with the extreme inversion of market competition in the past two years and the rapid expansion of public opinion dissemination, coupled with a series of problems exposed in its own strategy, organization and management system, the company's development has encountered short-term shocks.

Starting from October 2024, Nezha Automobile has been reported to have a 50% salary cut. In November 2024, Nezha Auto started a wave of layoffs, promising to pay off wages and compensate N+1 for employees. According to relevant media reports, including the refund of subscribed equity, Nezha Auto has accumulated arrears of nearly 400 million yuan in compensation and payables, involving more than 3,000 employees.

A person from the public relations department who left Nezha Auto in November last year told Phoenix Finance: "I have never received compensation from 'N+1'. Fortunately, I do not owed wages, but most of my colleagues have encountered wage arrears. Some of them still owed wages from September to November last year, owing half of their wages." It is understood that Nezha Auto's total debt is close to 10 billion yuan, of which the debt to its suppliers accounts for the vast majority.

In March this year, Nezha Auto held a supplier conference and discussed the debt-to-equity conversion plan and the progress of the E-round financing based on the debt owed by some suppliers. It is planned to convert 70% of the debt into equity of the parent company Hozon Auto; the E-round financing totaled 3 billion yuan, and it was originally scheduled to be delivered at the end of March this year, but due to the current high debt risk of Nezha Auto, it was postponed to April.

03 Is Nezha still saved?

Nezha Auto’s current situation has made employees, suppliers, car owners, etc. feel sad, and has also cast a shadow on the Internet car-making model promoted by Zhou Hongyi, the chairman and CEO of 360 Group.

Zhou Hongyi said in an interview that the weak brand strength is one of the reasons for Nezha’s poor sales. However, an analyst in the industry believes that the fundamental reason is that the product strength is not good. Without product strength, there is no brand strength. Nezha has always attached great importance to marketing over R&D. Although the "hard-rat" marketing has brought traffic and exposure in the past many times, without excellent product support, it is difficult to support the growth of sales in the long run.

As early as March 2024, Zhou Hongyi was visiting Nezha Automobile Factory and criticized Nezha’s former CEO Zhang Yong: “You can’t understand anything.” He bluntly stated that Nezha Automobile’s naming strategy is confusing, and there are also problems in marketing and product planning, and even called on Nezha executives to learn from Xiaomi.

On December 6, 2024, Fang Yunzhou, founder and chairman of Nezha Automobile, replaced Zhang Yong as CEO. Fang has been planning behind the scenes for many years, with a technical background and sufficient qualifications, but insufficient topics. What's worse is that according to Aiqicha, he has received 8 consumer restrictions since 2025.

Although the domestic business is almost collapsed, overseas business still has a glimmer of hope for Nezha Auto. Since 2024, Nezha Auto's development focus has clearly shifted to overseas markets. Fang Yunzhou regards the overseas market as a life-saving straw and plans to achieve "half-open domestic and foreign sales" by 2025.

Recently, Nezha Auto has been making continuous moves in Southeast Asia, South America and other regions. In November last year, Nezha Auto signed a contract with its Bolivian partners to deepen its South American market layout; in Indonesia, Nezha Auto's new store opened successfully. In 2024, Nezha Auto's overseas sales accounted for nearly half of the market, with a total sales of nearly 30,000 vehicles, and its sales channels expanded to 184, covering major global markets such as Southeast Asia, Central and South America.

(Fang Yunzhou, founder and chairman of Nezha Automobile)

(Fang Yunzhou, founder and chairman of Nezha Automobile)

For future development, Fang Yunzhou has put forward specific goals: while doing his best to achieve IPO, he can achieve half of sales and half of sales in the next 2-3 years. The overall gross profit margin will turn positive in 2025, and the company will make overall profit in 2026.

This strategy reminds LeTV Automobile's early global layout of the "North Luo Silicon Line" - Jia Yueting once claimed to build his own factory in the United States, but eventually became a laughing stock due to a broken capital chain.

Nezha’s overseas ambitions also face real-life questions: Will there be a breakthrough in the Indonesian electric vehicle market where competition is becoming increasingly fierce? Faced with supply chain shortcomings, Bolivia factories still rely on Chinese parts air transport. Is there any profit margin for a single unit under high transportation costs? In addition, in terms of policy risks, the South American market generally sets a threshold for localized production, and Nezha has not yet obtained Bolivian vehicle certification, which may affect its business expansion in the region.

In addition, if you want to copy Xiaomi’s routine in India, Lei Jun invested at least $2 billion to build a factory first. Nowadays, there are still a large part of Nezha’s 3 billion financing plan that needs to be paid off. Will there be money to open up the market?

From "cost-performance butcher" to "debt-hidden beast", Nezha Automobile's ups and downs reflect the collective anxiety of new forces in building cars. Can overseas breakthroughs and debt-to-equity conversion become life-saving straws? Can Zhou Hongyi and others stop losses in their investment? The answer may be hidden in Fang Yunzhou's next strategic implementation, but the time window is no longer subject to trial and error.