Chinese electric vehicle (EV) start-up Hozon New Energy Automobile, which is reeling from a cutthroat price war on the mainland, plans to sell half of its cars overseas as early as 2026 and attain profitability the same year, according to its founder.
The 10-year-old Shanghai-based carmaker recently downsized its operations following a series of challenges, including a cash crunch, that threatened its survival.
“Through optimisation and reorganisation, the company’s management structure will be simplified, and operations will become more efficient,” Fang Yunzhou, who is also the chairman, said in a statement to the Post. “Administrative costs will be reduced, and a team of young professionals will be built up.”
Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.
Fang did not elaborate on the lay-offs, but said they were necessary to “establish a new Hozon”, adding that the company was determined to launch an initial public offering in Hong Kong despite the cash-flow problems. He did not elaborate.
Fang Yunzhou, founder and chairman of Hozon New Energy Automobile, says the carmaker is trimming fat to be come lean and efficient. Photo: May Tse alt=Fang Yunzhou, founder and chairman of Hozon New Energy Automobile, says the carmaker is trimming fat to be come lean and efficient. Photo: May Tse>
The maker of Neta-branded EVs will also target middle-income consumers in China and break even in 2026, Fang said.
Sales of pure electric and plug-in hybrid cars on the mainland, the world’s largest EV market, accounted for 65 per cent of the global total in the first half of 2024, according to the China Passenger Car Association (CPCA).
But the domestic industry, crowded with more than 50 EV assemblers, is rife with overcapacity that has led to the collapse of many underachieving players, including WM Motor and Human Horizons.
EV makers in mainland China were capable of producing 17 million units a year at the end of 2023, with an overall factory utilisation rate of 54 per cent, according to Goldman Sachs.
“Hozon is facing difficulties because its vehicles are not as popular as its rivals,” said Chen Jinzhu, CEO of consultancy Shanghai Mingliang Auto Service. “The brutal price war is exacerbating its financial woes, and the carmaker will have to cut costs to survive the fierce competition.”
