Zotye Auto Loses 25.5 Billion in 6.5 Years with Debt Ratio at 96.1% as Chongqing Branch's Equipment Fails to Sell and T300 Model Struggles

Currently, Zotye Auto (000980.SZ) has effectively been removed from the ranks of complete vehicle manufacturers.

On the evening of August 8, Zotye Auto announced that the assembly production line and related equipment under the name of its subsidiary, Hunan Jiangnan Automobile Manufacturing Co., Ltd. Chongqing Branch, were put up for judicial auction. The first auction on that day was unsuccessful.

According to the compulsory execution requirements of the People's Court of Bishan District, Chongqing, the above-mentioned assembly production line and related equipment will be dismantled after the second auction, and all dismantling and vacating work will be completed by September 15.

Zotye Auto introduced that since the Chongqing branch of Hunan Jiangnan Automobile Manufacturing Co., Ltd. is the production base for the company's first choice model T300 for resumption of work and production, after the aforementioned judicial enforcement is completed, the company's Chongqing base will be unable to resume work and production as planned.

Zotye Auto Introduction: If the company is unable to resume work and production in 2025, it will severely affect its financial condition and ability to continue operations. The company will face financial risks, operational crises, and delisting risks caused by negative net assets at the end of 2025.

The Yangtze River Business Journal found that since 2019, Zotye Auto has been experiencing losses, with a cumulative net loss of 25.5 billion yuan over six and a half years. By the end of the first quarter of 2025, Zotye Auto's debt ratio was as high as 96.10%.

It is worth noting that currently, the position of President of Zotye Auto is temporarily held by the company's Board Secretary, Xie Lihong. In other words, Xie Lihong holds multiple positions, serving not only as Board Secretary and Vice President but also acting as President and Chief Financial Officer.

Net assets may be negative by the end of 2025.

In the 2024 annual report, Zotye Auto expressed confidence in its future development: "In 2025, the company will continue to pursue and expand in overseas markets, and further advance efforts such as optimizing supply chain costs for product BOM. The company's T300 model is now ready to resume mass production and sales. Meanwhile, to ensure the company's sustainable development in the future, a medium-to-long-term product plan has been formulated, with several new products set to begin the research and development process." However, it now seems that the company's plans may be difficult to achieve.

On the evening of August 8, Zotye Auto announced that the general assembly production line and related equipment under the name of its subsidiary, Hunan Jiangnan Automobile Manufacturing Co., Ltd. Chongqing Branch, were subject to judicial auction by the People's Court of Bishan District, Chongqing City, on Alibaba Auction. The first auction on that day was unsuccessful.

According to the enforcement requirements of the People's Court of Bishan District, Chongqing City, the assembly line and related equipment mentioned above should be dismantled after the second auction. The complete dismantling and vacating work must be completed by September 15th.

Zotye Auto stated that since the Chongqing branch of Hunan Jiangnan Automobile Manufacturing Co., Ltd. is the production base for the company's first-choice model T300 for resuming work and production, after the aforementioned judicial enforcement is completed, the company's Chongqing base will be unable to resume work and production as planned, which will have a significant impact on the company's operations and performance.

Zotye Auto also faces the delisting risk due to negative net assets.

At the end of 2024, Zotye Auto's audited net assets amounted to 235 million yuan. By the end of the first quarter of 2025, the company's net assets were 132 million yuan (unaudited). If the company cannot resume work and production in 2025, it will severely impact its financial condition and ability to continue as a going concern. The company will face financial risks, operational crises, and delisting risks stemming from negative net assets by the end of 2025.

According to the relevant provisions of the "Shenzhen Stock Exchange Listing Rules": If a listed company has a negative audited net asset value at the end of the most recent accounting year, the Shenzhen Stock Exchange will implement a delisting risk warning on its stock trading.

As of the end of the first quarter of 2025, Zotye Auto's total assets amounted to 3.505 billion yuan, a year-on-year decrease of 42.37%; total liabilities amounted to 3.368 billion yuan, a year-on-year decrease of 28.4%; the liability ratio reached 96.10%.

As of now, 595 million shares of Zotye Auto held by its controlling shareholder, Jiangsu Shenshang Holding Group Co., Ltd., and its persons acting in concert (accounting for 11.80% of the company's total share capital and 51.39% of the shares they hold) will be subject to judicial auction. On August 8, 2025, 384 million shares (accounting for 7.61% of the company's total share capital) were put up for judicial auction, of which 1.9645 million shares (accounting for 0.04% of the company's total share capital) were successfully auctioned, while the remaining 382 million shares (accounting for 7.57% of the company's total share capital) failed to be auctioned.

Zotye Auto stated that the aforementioned auction is a result of judicial enforcement, and the actual changes are subject to the final court execution. Whether the relevant shares being judicially auctioned will lead to a change in the company's controlling shareholder remains uncertain.

The semi-annual forecasted loss exceeds 135 million yuan.

Recently, Zotye Auto released its 2025 semi-annual performance forecast, expecting a net profit loss of 135 million to 200 million yuan in the first half of the year, representing a reduction in losses of 22.66% to 47.80% compared to the same period last year. The loss in net profit excluding non-recurring items is expected to be 101 million to 151 million yuan, a reduction in losses of 49.27% to 66.18% compared to the same period last year.

Zotye Auto explained that in the first half of 2025, the company was unable to resume production and operations in the vehicle business due to a lack of operating funds, resulting in continued losses.

Since 2019, Zotye Auto has been experiencing losses, with a cumulative net profit loss of 25.35 billion yuan over six years. Including the latest performance, Zotye Auto's net profit loss over six and a half years is approximately 25.5 billion yuan.

In terms of sales, Zotye Auto sold 21,000 vehicles in 2019, and starting from 2020, it even entered a state of suspension of production.

In October 2022, Zotye Auto announced that since the completion of the restructuring at the end of 2021, the company has been committed to the resumption of vehicle production. Currently, the preparatory work for resumption is basically complete. The company plans to roll off the first batch of resumed production T300 models at the Yongkang base on October 20 and hold a rollout ceremony.

In 2024, Zotye Auto's sales volume, production volume, and inventory were 14 units, 0 units, and 336 units, respectively. From this, it can be seen that all the cars sold by the company were "inventory cars."

In the 2024 annual report, Zotye Auto stated that since its restructuring in 2022, due to the price war and severe internal competition in the automotive industry, coupled with the company's specific issues of lagging behind in core competencies such as products, technology, cost, market, and capital reserves, the company has not resumed large-scale production and sales of complete vehicles.

In terms of management, in June 2025, Zotye Auto announced that the company recently received the resignation report from Vice President Fan Chengwei, who was acting as the President. Fan Chengwei applied to resign from the position of Vice President due to personal reasons, and his resignation report takes effect from the date it is delivered to the company's board of directors. After resignation, Mr. Fan Chengwei will no longer hold any position in the company.

It is noteworthy that Fan Chengwei's original term was set to expire on February 16, 2025.

Subsequently, Zotye Auto announced that the company's board of directors agreed to appoint the board secretary, Xie Lihong, as the company's vice president, with her term consistent with the eighth board of directors. At the same time, to promote the company's operational development and ensure smooth business operations, the board agreed to authorize Xie Lihong to act as president until the board appoints a new president.

According to her resume, Xie Lihong was born in December 1978. She graduated from Zhejiang University with a master's degree and is an economist. Xie Lihong has served as the head of the securities department and the securities affairs representative of Huadong Medicine Co., Ltd., the board secretary and compliance director of Zhejiang Ande Electric Co., Ltd., and the assistant to the chairman, deputy general manager, and board secretary of Hangzhou Reliable Nursing Products Co., Ltd. She is currently the vice president and board secretary of the company, and also acting as the president and chief financial officer.