Can Neta escape the fate that once befell WM Motor and HiPhi?
In Chinese mythology, after Nezha committed suicide, Taiyi Zhenren used a lotus flower to rebuild his physical body, bringing him back to life. People once thought this was nothing more than a fictional myth, but it has unexpectedly mirrored real-world events.
Nezha Auto has been suspended for nearly two years. As hopes of resuming production grew increasingly slim, Zhejiang Taiyi Shenlian Enterprise Management Partnership (Limited Partnership) (hereinafter referred to as Taiyi Shenlian) became its restructuring investor.
According to reports from *Jiemian*, Hozon New Energy Automobile Co., Ltd. (parent company of Nezha Auto, hereinafter referred to as Hozon Auto) recently held the 4th creditor's meeting for its bankruptcy restructuring case, where the "Restructuring Plan (Draft)" (hereinafter referred to as the "Draft") proposed by Taiyi Shenlian was discussed.
The Draft plans to invest 30 billion yuan to "resurrect" Nezha Auto, with an annual production target of 300,000 units, and to launch preparations for an IPO. Such a vision is not unfamiliar, as it previously appeared in the restructuring plans of WM Motor and HiPhi, but ultimately the funds failed to arrive, and nothing came of those plans.
Is this restructuring of Nezha Auto a genuine industrial restart, or just another capital story?
Has Nezha finally found its "savior"?
Back at the end of 2021, Li Bin, founder of NIO, stated during that year's NIO Day that the capital threshold for building cars would likely be no less than 400 billion yuan. Five years on, how much money has Taiyi Shenlian prepared to "resurrect" Nezha Auto? The answer is 30 billion yuan.
The Draft puts forward a very specific "resurrection" plan. Taiyi Shenlian plans to invest 30 billion yuan to acquire approximately 70.62% of Hozon Auto's equity and become its controlling shareholder. This sum is divided into two parts: 11.67 billion yuan is intended to pay off the claims corresponding to retained assets, bankruptcy expenses and restructuring costs. The remaining 18.33 billion yuan will be used as working capital, mainly for resuming production, reconstructing the supply chain, after-sales maintenance and daily operations. That means the funds actually used for "car manufacturing" only account for 60% of the total investment.
Compared with building a new production system from scratch, resuming production of Nezha Auto seems to be based on existing factories and assembly lines, but in reality it faces a more complex situation. The balance sheet of Hozon Auto disclosed in the Draft is not optimistic. Among them, priority claims amount to about 22 billion yuan, involving 9 creditors, with only interest paid in the first three years and principal repaid in installments starting from the fourth year. Ordinary claims total about 117 billion yuan, involving more than 1,600 creditors. For claims of less than 800,000 yuan, the comprehensive repayment rate is about 12%, with 10,000 yuan paid within 12 months first and the balance paid off within two years; for the part exceeding 800,000 yuan, all will be converted into equity without cash repayment.
A 12% repayment rate means that suppliers can only recover about 10% of the advance payment for goods in the end. Whether such a disposal plan can rebuild the trust of the supply chain in the subsequent production resumption process is still unknown.
With limited funds, Nezha's "resurrection" is doomed not to achieve simultaneous development in multiple fields. The Draft makes trade-offs for the products of Nezha Auto before its suspension, retaining the production lines and equipment corresponding to Nezha X and Nezha L as the core operating assets after restructuring, indicating that the company will focus on the cost-effective SUV track in the future. The Nezha S and Nezha GT models and related equipment that were previously developed to impact the high-end market and compete with first-tier brands have been put on hold for separate disposal and realization.
Even if Nezha's resurrection plan is implemented smoothly, in the extremely competitive domestic market, how many consumers who worry about buying "discontinued cars" are willing to pay for its products? Under such a market environment, going overseas has become a more realistic choice for Nezha, with the first-year sales target set at 10,000 units. Obviously, such sales data is not outstanding. Therefore, the Draft plans for subsequent development, including developing adapted models for the markets in Asia, Africa and Latin America, with a planned annual output of 300,000 units; continuing to build global intelligent models to achieve an annual output value of 400 billion yuan, and launching IPO preparations.
However, behind this plan, there is a more realistic bottom line. Nezha Auto has been out of production for nearly two years. According to relevant regulations, if a car company's average annual passenger car output for two consecutive years is less than 2,000 units, it will be identified as unable to maintain normal production and operation, and the Ministry of Industry and Information Technology will issue a special public notice, during which the access change will not be handled.
The "dual qualifications for car manufacturing" held by Nezha is its most important intangible asset. Once lost, restructuring will become more difficult. This means that this restructuring is not just about restarting a production line, but a battle to preserve production qualifications.
Even so, there are still variables in whether the Draft can be implemented, which is subject to the vote of creditors and the approval of the court. More realistically, the 30 billion yuan funds have not been fully paid in, and if any link changes, the restructuring plan may only remain on paper.
Will things not go wrong for the third time?
The names of Taiyi Shenlian and Nezha are in line with the story setting of *Investiture of the Gods*, but what deserves more attention is the equity relationship and capital arrangement behind them.
Information from Qichacha shows that Taiyi Shenlian was established in April 2026, jointly funded by Zhejiang Shanzi Holding Co., Ltd. and Zhejiang Shanzi Yuxu Technology Co., Ltd. The actual controller of the former is Ye Ji, chairman of Shanzi Hi-Tech, and the actual controller of the latter is Yu Shuxin, head of the office of the board of directors of Shanzi Hi-Tech. The Draft refers to it as a "special entity established for this restructuring", whose management team has experience in automotive industry operation and bankruptcy restructuring, and has completed the bankruptcy restructuring of a listed company in the auto parts industry.
Affected by the restructuring news, the share price of Shanzi Hi-Tech hit the daily limit of 10% as soon as the market opened on September 14. On September 15, Shanzi Hi-Tech issued an announcement stating that there is no equity control relationship between the company and Taiyi Shenlian, and the company has not directly or indirectly participated in the bankruptcy restructuring investment of Nezha Auto through controlled entities; the participation of the company's controlling shareholder in the bankruptcy restructuring investment of Nezha Auto through its controlled entities is still in the intention stage, and there is great uncertainty about whether relevant procedures can be completed and approvals can be obtained.
Judging from the wording of the announcement, Shanzi Hi-Tech has drawn a clear line of responsibility with Taiyi Shenlian. But the market is no stranger to the "Shanzi Department" controlled by Ye Ji's foray into car manufacturing. The predecessor of Shanzi Hi-Tech, Yinyi Co., Ltd., was engaged in the real estate industry, once mired in a debt crisis and went through bankruptcy restructuring, and was reborn by transforming into the auto parts track. This experience allowed Shanzi Hi-Tech to accumulate corporate restructuring experience, and also made Ye Ji always have a persistent obsession with complete vehicle production qualifications.
However, the two previous attempts of the "Shanzi Department" controlled by Ye Ji to enter the complete vehicle industry did not achieve satisfactory results. In Hebei, the "Shanzi Department" acquired Hongxing Automobile, renovated the factory and put into production logistics distribution vehicles, but the passenger car qualification was later cancelled. In Heilongjiang, the "Shanzi Department" once revitalized the former Hafei Automobile factory to produce Yunfeng Automobile for export to Russia, but the final project failed to meet expectations and ended with the sale of part of the equity.
This time, the difficulty is only increasing. The 30 billion yuan investment has not been fully paid in, and Taiyi Shenlian has only paid 50 million yuan as a deposit so far. Only 18.33 billion yuan is actually used for production and operation, which is not sufficient for complete vehicle manufacturing to restart production lines, reconstruct the broken supply chain, and build overseas sales networks and after-sales systems. It also takes a lot of time to form a team, restore sales channels and run in all links again.
At the same time, since the suspension, Nezha's brand reputation in the domestic market has been severely damaged, and there are outstanding after-sales debts for hundreds of thousands of existing car owners, which makes the restart of the domestic market face considerable obstacles. Therefore, the restructuring plan places its bet on overseas expansion. At the creditor's meeting, the Taiyi Shenlian side stated that it has obtained some overseas intended orders. However, as domestic leading car companies have accelerated their overseas expansion in recent years, competition in Southeast Asia, Latin America and other markets has become very fierce. For new entrants to gain a firm foothold, they need both product competitiveness and price advantages. All of this requires continuous capital investment to support, and it is difficult to sustain long-term product R&D and market expansion with only more than 1.8 billion yuan of start-up funds.
More critically, the failure of the two previous complete vehicle projects has also made the public question Ye Ji's operation this time. At least from the past records, he has no advantages in complete vehicle manufacturing experience and project operation capabilities. This time taking over Nezha Auto is essentially a high-risk gamble.
Great changes have taken place in the industry
While the draft of "resurrecting" Nezha remains on paper, two major signals have emerged one after another in the automotive industry recently.
On September 15, Seres and Huawei Harmony Intelligent Mobility announced that the product definition, brand marketing, channel retail and service system of AITO will be changed from "Huawei-led" to "Seres-led, Huawei-empowered". Huawei will participate in a light asset mode, and shift resources to the Zhijie, Xiangjie, Zunjie and Shangjie series. Consumers are used to regarding AITO as Huawei's "own brand", but in the face of realistic sales performance and interest demands, the two sides finally came to the step of "separation". After the news was released, Seres' A-share stock closed down 5.09% on the same day.
The day before, GAC Group suspended trading and issued an announcement saying that it plans to issue shares to acquire the equity of the complete vehicle joint venture held by FAW. The market generally expects that this refers to FAW Toyota. If the transaction is completed, FAW will become the second largest shareholder of GAC, and FAW Toyota and GAC Toyota are expected to be integrated to open up sales channels and product lines, avoiding internal friction in redundant competition.
The cooperation between Huawei and AITO was previously regarded as a model of the industry, but in the face of interest considerations, it was forced to "separate"; the alliance between FAW and GAC is a rare partnership between central state-owned enterprises and local state-owned enterprises. Both cases show that under the background of intensifying industry competition, even leading car companies need to reduce costs and streamline business to improve their survival rate. In contrast, can the "cold-start" Nezha Auto do better than these leading car companies in product strength, cost control and consumer confidence?
What deserves more attention is that WM Motor and HiPhi have already proved that once a company falls into suspension, even if the restructuring plan is approved, it does not mean that the company can survive in the market again. After WM Motor suspended production, its restructuring investor Xiangfei promised to invest 1 billion yuan in the initial stage, but the funds were not paid in, and its related Baoneng Department was mired in a debt crisis. *Baobian* has visited its Wenzhou factory many times and found that although there are security guards at the gate, the resumption of production remains on paper due to insufficient funds. HiPhi, which took the high-end route, attracted overseas investors, but the market capacity and brand residual value cannot support the investment in resuming production, and its restructuring has stalled. The similar outcome of the two cases shows that without sustained sales and cash flow, restructuring may only be a blank check.
Similarly, what Nezha Auto needs to answer is not just "whether it can resume production". Under the current industry environment, even if the funds in the Draft are in place, it only presses the start button, and cannot guarantee that Nezha Auto has entered a safe zone. After production resumption, supply chain trust reconstruction, channel reconstruction, after-sales support and overseas expansion all require subsequent cash flow support. Cash flow ultimately depends on sales, and sales depend on brand trust, which takes far more time than restarting production lines.
In myths, Taiyi Zhenren can use a lotus flower to rebuild Nezha's physical body. But the industry knockout competition is advancing in depth, and Nezha Auto has no advantages in supply chain, cash flow, products and after-sales. When Seres, FAW and GAC all need to carefully calculate economic accounts, the resurrection of Nezha Auto cannot only rely on a restructuring blueprint that stays on paper.
This article is from WeChat official account "Baobian" (ID: baobiannews), author: Chen Fashan, published with authorization from 36Kr.