Detailing Neta's fall from grace

Bangkok Post

6 days ago

Jutamas Tadthiemrom, an employee of a Bangkok-based media corporation, has been using her Neta electric vehicle (EV) for just over a year. The main reason she bought it was to reduce her fuel expenses, as she had used her previous car for more than 12 years.
But the Chinese EV maker, which has attracted interest among motorists worldwide, failed to impress Ms Jutamas after the delivery of her vehicle was delayed.
"The quality of the car has been decent, considering the price. There have been no major faults," she told the Bangkok Post.
However, TQM, Neta's insurance broker in Thailand, called Ms Jutamas to cancel the second-class insurance policy she held offered by Viriyah Insurance, even before Hozon New Energy Automobile Co, the Chinese parent of Neta, formally announced its bankruptcy.
At that point, she decided to secure a third-class insurance policy offered directly by Viriyah Insurance in case Neta's Thai subsidiary also entered into bankruptcy. However, she wondered which company would be responsible for her car's maintenance going forward and whether it would be difficult in the future to secure some form of compensation, given the parent company's status.
WHAT HAPPENED TO THE NETA BRAND?
Ms Jutamas is not the only concerned Neta owner in Thailand, as the Chinese company that entered the Thai market in 2022 has struggled to compete with BYD, a rival Chinese EV brand.
As a consequence, Neta Thailand has struggled to meet the Thai government's requirements for its incentive programme aimed at boosting EV production.
Under the scheme, car manufacturers were exempt from import duties in 2024, but were obliged to match import volumes with domestic production. Citing decelerating sales and tightening credit conditions, car manufacturers asked the government to adjust the scheme and the production shortfall in 2024 has since been rolled over into this year.
As Neta's parent firm entered bankruptcy proceedings in China last month, according to state media, the Thai unit is unable to produce the required number of cars locally. According to Reuters, the Excise Department received a complaint filed last month by 18 Neta dealers in Thailand seeking to recover more than 200 million baht of allegedly unpaid debt.
Neta's share of Thailand's EV market peaked at 12% of total sales in 2023 when the industry was growing, according to data based on industry research. BYD secured a 49% market share in 2023.
In the first five months of 2025, new registrations of Neta vehicles slumped 48.5% year-on-year and its share of EV registrations dropped to just 4%, according to government data.
Neta car owners took to social media in droves to share their experiences with maintenance issues and limited after-sales support. A consumer watchdog agency is investigating some of these complaints.
Meanwhile, industry analysts said Neta's issues are specific to the company and do not indicate flaws in Thailand's policies or market. However, external shocks such as geopolitical tensions and higher US tariffs on imports of Thai products have added pressure to the sector.
HOW IS NETA'S PROVISION OF AFTER-SALES SERVICE AND BUSINESS CONTINUITY HERE?
This question was put to Sun Baolong, head of Southeast Asia business for Zhejiang Hozon New Energy Automobile, but he did not respond.
Mr Sun transitioned to this position from his previous role as general manager of Neta Auto Thailand when the company appointed a new board of directors last month, with representatives from the headquarters in China joining the board.
The Office of the Consumer Protection Board is investigating Neta's business in Thailand after summoning Neta representatives for talks on how to prevent negative impacts for Thai consumers following a report from a state-owned news agency in China that Neta Auto Thailand's parent filed for bankruptcy.
The company's financial shortcomings were brought to the court in China after a creditor sued the company over an unpaid debt of roughly 5.3 million yuan (US$730,000), amid total liabilities exceeding 10 billion yuan ($1.4 billion).
Mr Sun previously told the Bangkok Post Neta would continue to manufacture and sell Neta cars in Thailand.
To alleviate motorists' concerns over maintenance services and the availability of spare parts, Neta opened a new spare parts distribution centre in Nakhon Pathom in May, attempting to improve after-sales services.
A shortage of some replacement parts led to delays in repairs, with some repairs taking up to 10 months.
It remains unclear how Neta Auto Thailand will address its financial difficulties as the company's executives could not be reached for comment.
Bangchan General Assembly, a local partner of Neta, must pay a fine if Neta is unable to meet the battery electric vehicle (BEV) production target, a requirement for participants in the government's EV incentive scheme, according to an observer from the Electric Vehicle Association of Thailand (EVAT) who requested anonymity.
Neta partnered with Bangchan General Assembly to commence the assembly of BEVs here in March 2024, becoming the company's first BEV plant outside China.
Annual production at the plant in Bangkok's Min Buri district is 10,000 units.
As of May this year, the company has sold roughly 25,000 cars in Thailand.
Bangchan General Assembly, an original equipment manufacturer assembling internal combustion engine cars for many brands, must take some responsibility for the production shortfall as it signed a memorandum of understanding with the Excise Department on Nov 28, 2022, obliging it to produce the amount of BEVs as required by the government, according to the EVAT source.
The company risks failing to meet the production target as Neta has not supplied it with the EV components required since its parent encountered cash flow issues.
EV manufacturers are required to pay a fine of around 400,000 baht per car to authorities if they fail to meet the government's production requirements, said EVAT president Suroj Sangsanit.
These companies are also required to return any subsidies received under the EV incentive scheme to the government, according to Deputy Finance Minister Paopoom Rojanasakul.
Neta joined the second-phase EV incentive scheme, dubbed EV3.5, offering passenger car and pickup manufacturers a subsidy of up to 100,000 baht per unit.
The government also reduced import duties on completely built-up EVs to a ceiling of 40% for 2024 to 2025, and cut the excise tax to 2% from the original rate of 8%.
Participating companies have to produce vehicles domestically to compensate for imported units, at a ratio of two locally produced BEVs for each one imported until 2026.
If participants are unable to meet this production target, they must compensate at a ratio of three locally-produced BEVs for each imported vehicle in 2027.
In addition to Bangchan General Assembly, Neta dealers may also be in hot water.
The dealers lodged a complaint with the Excise Department last month, accusing Neta of "deceiving them into selling cars" after the company failed to pay off debts worth 200 million baht it owed to them, according to media reports.
The complainants believe there is little chance of Zhejiang Hozon New Energy Automobile being able to continue its business.
HOW DO INSURERS FEEL ABOUT THE SITUATION?
Seree Gavinratchatarot, chairman of the motor insurance committee of the Thai General Insurance Association (TGIA), said Neta's service centres in Thailand remain operational, and customers with insurance policies can still file claims and get their vehicles repaired as normal.
However, he admitted the bankruptcy of Neta's parent company could affect Thailand's insurance sector, particularly if the company fails to expand its repair centre network.
Mr Seree reassured policyholders that insurance companies in Thailand continue to support all Neta owners, even after the parent's collapse in China.
If Neta eventually closes its service centres in Thailand, insurers have said they are prepared to arrange alternative EV repair garages for their clients.
"We have contracts with general repair garages that understand EV body and structural repairs. These garages are still limited in number, so customers might experience longer waiting times," said Mr Seree, who is also chief operating officer of Tokio Marine Insurance (Thailand).
"Those holding Neta policies should not be concerned as claims can still be processed as normal. If Neta service centres are closed, repairs would simply be carried out at alternate garages."
Regarding premium calculations for Neta EVs, each insurer will evaluate the risk and pricing individually, he said, as insurers continue to underwrite policies for Neta and other EV brands, although terms and conditions may be adjusted.
Insurance premiums are unlikely to increase significantly, as rate adjustments depend on various factors including claim costs and driver behaviour, said Mr Seree.
He acknowledged that EV insurance remains unprofitable at this stage, with loss ratios still running high.
"The EV insurance market is still in its early stages, and insurers are working to find a sustainable balance," said Mr Seree.
Somporn Suebthawilkul, TGIA president and managing director of Dhipaya Insurance, said motor insurance growth this year is likely to stagnate compared with 2024, as the economy shows signs of slowing down.
Consumer sentiment towards EVs has started to shift, with more people hesitating on purchases, he said.
"The bankruptcy of Neta in China combined with emerging concerns about other major Chinese EV brands could lead to a drop in EV sales in the second half of this year, likely resulting in a corresponding decline in EV insurance premiums."