This year, NETA Auto surpassed many of its peers in China’s electric vehicle market, including NIO, Li Auto and XPeng, to take the top spot in terms of overall deliveries. But the Chinese automaker is now facing questions about possibly exaggerated delivery figures. In addition, as a brand with an average product price of 80,000 yuan ($11,311), it has recently tried to explore the high-end market with the launch of a model costing 300,000 yuan, a move that has aroused further public scrutiny.
Not widely known until recently, NETA has emerged this year as a dark horse in China’s EV field. Its founding team members come mainly from traditional automakers such as Chery and BAIC. The core team headed by founder Fang Yunzhou is basically from the new energy division of Chery. In 2018, Zhang Yong, the former deputy general manager of BAIC Bluepark New Energy, joined the team to serve as CEO.
NETA’s first three models start at 59,800 yuan, 139,800 yuan and 59,900 yuan, respectively. Two other models named the NETA U Pro and the NETA V Pro start at 99,800 yuan and 76,900 yuan.
Zhang Yong has attracted many customers from local governments and institutions. While at BAIC Bluepark New Energy, Zhang focused on building partnerships with local governments. He has applied the same formula for NETA, bringing in government-affiliated investment platforms, which has led to a flood in vehicle orders.
But NETA’s rising deliveries have been accompanied by controversy over its data. NETA purportedly delivered 18,016 vehicles in October, up 122% from a year earlier. But only 9,832 NETA vehicles were insured in October – 8,184 fewer than the delivery figure. The volume of insured vehicles can better reflect the real sales of automobile enterprises related to individual consumers.
There are two possible reasons for the discrepancy. First, NETA has focused on services for enterprises instead of individual consumers, although Zhang Yong, CEO of NETA, said that he has been reducing the proportion of this market. Second, NETA’s vehicles are mainly sold by dealers. By the end of October this year, the firm had 355 stores in China, only 110 of which are directly owned by NETA.
Still, the company is not content with the lower end of the EV market. In July, NETA launched its NETA S series, with some models even selling for more than 300,000 yuan. Zhang claimed that NETA S was the best coupe with a price tag of less than 1 million yuan. He added that he expected the NETA S to sell between 10,000 and 20,000 units within a single month.
NETA has obvious technical shortcomings and increasing losses. In 2020, the net loss was 1.321 billion yuan, and it increased to 2.908 billion yuan in 2021. A total of 15,091 units were delivered in 2020 and 69,674 units in 2021. According to this calculation, NETA’s revenue per vehicle in 2020 and 2021 is only about 80,000 yuan, and it loses more than 40,000 yuan with each car sold.