Our reporter (chinatimes.net.cn) reporter Tian Tian and Yu Jianping reported from Beijing
Nezha Automobile, which has been out of production for nearly two years and has debts of more than 26 billion yuan, finally unveiled its restructuring plan at the fourth creditors meeting. On September 11, the fourth creditors meeting in the bankruptcy and reorganization case of Hezhong New Energy was held online. The “Reorganization Plan (Draft)” disclosed for the first time that the reorganization investor was Zhejiang Taiyi Shenglian Enterprise Management Partnership (Limited Partnership), which planned to invest 3 billion yuan to acquire approximately 70.62% of the equity of Hezhong New Energy.
Industry insiders believe that for a car company with only 15.4591 million yuan of available funds on its books and a total declaration of 1,631 creditors exceeding 26 billion yuan, whether the injection of this capital can help the 400,000 existing car owners get rid of the dilemma of “cannot use, repair, and sell” is a more realistic issue than the mythical narrative of “Taiyi Zhenren saved Nezha”.
Who is Taiyi Shenglian? Where has Nezha Automobile gone?
The coincidence of the name “Taiyi Holy Lotus” has been given too much room for imagination by the outside world. In the myth of Nezha, Master Taiyi used lotus flowers to reshape Nezha’s body, and the name of the takeover company exactly echoed this plot, and ridicule that “this matter is also recorded in the list of gods” quickly appeared on social platforms. But the industrial and commercial registration information reveals a clearer industrial context.
Taiyi Shenglian was registered and established in April 2026. It is a special purpose entity specially established for this reorganization. Its partner structure is: Zhejiang Shanzi Holdings Co., Ltd. holds 99.9667% of the shares, and Zhejiang Shanzi Yuxu Technology Co., Ltd. holds 0.0333% as the executive partner. The actual controller of the former is Ye Ji, chairman of Shanzi Hi-Tech, a company listed on the Shenzhen Stock Exchange, and the actual controller of the latter is Yu Shuxin, the head of the board of directors of Shanzi Hi-Tech. Shanzi High-Tech clearly clarified in the announcement that the listed company itself will not participate in this reorganization, and the investment funds and operating entities are outside the listed company system and will not be included in the scope of consolidated statements.
Shanzi Hi-Tech itself is an auto parts supplier and has made many arrangements in the field of complete vehicles in recent years. In 2023, it obtained the qualification to produce passenger cars through the acquisition of Hebei Red Star Automobile, and renovated the old factory to produce Bosiwancheng logistics vehicles. After that, it cooperated with Geely to revitalize the original Hafei Automobile factory and produce Yunfeng Automobile specially for the Russian market. In July 2025, the first model jointly built by its subsidiary Shanzi Yuqian and Tmall entered the engineering verification stage and is planned to be mass-produced in the third quarter of 2026. Taiyi Shenglian’s management team is described as “having extensive experience in operating the automobile industry and experiencing bankruptcy and reorganization.”
The falling curve of Nezha’s car happened very quickly. In 2022, it topped the annual sales list among new car manufacturers with a delivery volume of 152,100 vehicles, ahead of Li Auto’s 133,200 vehicles and NIO’s 122,500 vehicles. However, this achievement is based on two low-priced models, Nezha V and Nezha U. The terminal price was once as low as 49,800 yuan. From 2021 to 2023, Hezhong New Energy’s net losses were 4.840 billion yuan, 6.666 billion yuan, and 6.867 billion yuan respectively, with a cumulative loss of nearly 18.4 billion yuan in three years. In June 2025, the Intermediate People’s Court of Jiaxing City, Zhejiang Province ruled to accept the bankruptcy and reorganization of Hezhong New Energy. Since then, all production lines in the three places (Tongxiang, Zhejiang, Yichun, Jiangxi, and Nanning, Guangxi) have been suspended. Employees are owed wages and suppliers are unable to repay their debts.
According to the “Reorganization Plan (Draft)”, the allocation of 3 billion yuan of funds has been clarified: 1.167 billion yuan will be used to pay off related claims and bankruptcy expenses corresponding to the assets to be retained, and the remaining 1.833 billion yuan will be injected into Hezhong New Energy as working capital for resumption of production. However, compared with the total claims of approximately 13.9 billion yuan confirmed by the manager (including approximately 11.7 billion yuan of ordinary claims and approximately 2.2 billion yuan of priority claims), this debt repayment scale means that the partial repayment rate of ordinary claims within 800,000 yuan is only about 12%, and the excess will be converted into debt-for-equity swaps.
Automobile industry analyst Zhai Qiang explained to the China Times reporter: “The essence of this settlement plan is to use an ‘extremely low cash settlement rate’ in exchange for creditors’ compromise on the company’s ‘survival’. A 12% settlement rate means that most small and medium-sized suppliers can only get back 10% of their output.” However, this is a relatively realistic result that creditors can obtain compared to the liquidation of the company. Converting the remaining debt into equity binds the creditors from “debt collectors” to “shareholders”, and only when Nezha truly resumes production and makes profits can the debt-to-equity swap be valuable.”
Production resumption plan and restoration path for car owners’ rights
The contents of the restructuring plan that are directly related to existing car owners are concentrated in the goals of the first phase. According to the plan, the core task during the resumption of production start-up period is to resume the production of Nezha X model, focusing on overseas markets, with a sales target of 10,000 units in the first year. What is being promoted in parallel with the resumption of production is to “rebuild confidence in upstream supply chain cooperation, ensure the supply of official spare parts, fully resume after-sales maintenance of Nezha cars, and activate the existing service network to provide official maintenance services to car owners.”
This arrangement directly responds to the actual difficulties faced by Nezha car owners in the past year or so. After Hezhong New Energy entered bankruptcy and reorganization procedures, the car experience of a large number of car owners deteriorated sharply. A Nezha U car owner told a China Times reporter: “The lifetime warranty on three electric vehicles promised when purchasing the car could not be fulfilled after the battery failed. The 4S store said it could not contact the manufacturer.”
Another Nezha V owner experienced a shutdown of the Internet of Vehicles function, the App was unable to refresh the vehicle positioning, and functions such as remote unlocking failed. It is also difficult to dispose of second-hand cars. Some car owners spent 140,000 yuan to purchase a car, but the residual value of the second-hand car was less than 50,000 yuan, with a depreciation rate of nearly 70%. Some car dealers have made it clear that they are unwilling to acquire vehicles from violent car companies.
The mechanical equipment of the Nezha L and Nezha X models were classified as core operating assets and retained, while the related equipment of the Nezha S and Nezha GT were classified as non-core assets and disposed of separately. Zhai Qiang said; “This means that the supply of after-sales maintenance parts will focus on affordable models with large numbers of customers, while owners of the higher-positioned Nezha S and GT models may face a longer waiting period for their after-sales protection.”
In terms of user scale, Nezha Auto has approximately 400,000 existing car owners. Taiyi Shenglian has not yet disclosed the specific equity compensation plan for old car owners, such as whether the three-power warranty will be extended, how to restore Internet of Vehicles services, how to deal with existing maintenance debts and other details. It still needs to wait for further arrangements after the reorganization plan is officially approved.
From the perspective of capital allocation structure, 1.833 billion yuan of working capital needs to support production resumption and procurement, supply chain reconstruction, after-sales network repair and daily operations at the same time. The space left for the restoration of the rights and interests of existing car owners depends on the pace of production resumption and the priority of fund use.
From an industry perspective, the situation of Nezha Automobile is an aspect of the current clearing and acceleration of the new energy vehicle market. In the first half of 2026, the CR10 of the domestic new energy passenger car market reached 85.2%, with BYD accounting for approximately 24.3% (wholesale basis), followed by Geely Automobile and SAIC with 13.2% and 10.1% shares respectively.
Zhai Qiang analyzed: “In 2018, there were 487 domestic electric vehicle manufacturers. By 2023, only more than 40 will be operating normally. It is expected that 70% of small and medium-sized car companies will be eliminated in the next three to five years. In this pattern of continuous increase in concentration, Nezha Automobile has restarted with an annual sales target of 10,000 vehicles. It is facing an arena where the head effect is far more significant than in 2022.”
According to the restructuring plan, the Nezha X model has resumed production and “has already received some intended orders.” Ne Zha However, overseas markets are also flooded with a large number of Chinese car companies, and price competition is no milder than domestic. The goal of developing models for the Asian, African and Latin American markets with an annual production of 300,000 units in the second phase of the plan and the starting point of 10,000 units in the first phase are separated by a series of problems that need to be solved one by one, such as supply chain reconstruction, channel recovery, and brand recognition repair.
