Core Viewpoint - Neta Auto's debt-to-equity swap plan has failed, leading to increased financial distress for the company, which owes approximately 6 billion yuan to suppliers [1][2]. Group 1: Debt Situation - Neta Auto owes around 6 billion yuan to suppliers, with an initial plan to resolve half of this debt, amounting to 3 billion yuan, to secure new funding [1]. - Only a little over 2 billion yuan of debt could be resolved through the debt-to-equity swap, leaving several billion yuan unresolved [2]. - The company had previously reached agreements with 134 core suppliers for over 2 billion yuan in debt-to-equity swaps, including major players like CATL and Guoxuan High-Tech [2][3]. Group 2: Management and Leadership Issues - There are calls from investors to remove founder and CEO Fang Yunzhu as a condition for continued support [4]. - Fang Yunzhu acknowledged the company's crisis in an internal letter, highlighting issues in strategy, organization, and management [6]. - High-level departures have occurred, including the resignation of the former CEO Zhang Yong and other executives [6]. Group 3: Operational Challenges - Over 300 dealers have demanded compensation for operational losses and the return of unpaid rebates and subsidies by May 11 [8]. - Fang Yunzhu has publicly apologized and promised to resolve issues related to parts supply and vehicle deliveries [10]. - Legal troubles are mounting, with over 400 judicial cases involving Neta Auto's parent company, and Fang Yunzhu being listed as a person subject to enforcement with 20 million yuan in frozen shares [10][14]. Group 4: Financial Performance - Neta Auto's sales peaked in 2022 at 152,000 units, but have since declined significantly, with 2023 sales dropping to approximately 127,500 units, a 16.16% decrease [20][23]. - Projections indicate a further decline in sales, with estimates of 64,500 units in 2024, representing a 49.37% drop [23]. - The company has faced management turmoil, with frequent changes in leadership affecting strategic direction and product planning [25]. Group 5: Future Outlook - Despite the current challenges, there may still be a glimmer of hope for Neta Auto, as the situation is not yet deemed a complete failure [17]. - The competitive landscape in the new energy vehicle sector remains intense, and the company's ability to navigate this crisis is uncertain [27].