Hong Kong to power global ambitions of Chinese mainland’s electric vehicle brand Neta

More than 10 million EVs were sold worldwide in 2022 – 14 per cent of all car sales – the International Energy Agency, a Paris-based autonomous intergovernmental organisation providing global energy sector analysis, reported last year. It also said more than 2.3 million electric cars were sold during last year’s first quarter, and estimated that up to 14 million EVs would be sold by the year’s end.

China has emerged as the leading global producer of EVs – accounting for more than half of all sales in 2022, with its market share expected to continue to increase. Hozon Auto, based in Shanghai, is determined to tap into this growth market.

After spending the past 10 years establishing itself as an emerging leader in the country’s new energy vehicle industry, it now hopes to turn itself into one of the top global EV makers through sales of Neta Auto’s flagship EVs. “In the next 10 years, the first thing we have to do is transform ourselves from being China’s Hozon to the world’s Neta,” Zhang says.

The name of its car brand, Neta, is inspired by Nezha, a god in Chinese mythology who offers protection. To achieve its global ambitions, the company has chosen Hong Kong, with its international reputation as a regional business centre and travel destination, as its launch pad. “Hong Kong will be an important anchor point for us at Neta to expand abroad,” Zhang says.

Neta Auto is among the 45 strategic partners of the Office for Attracting Strategic Enterprises (Oases). This Hong Kong government initiative, established at the end of 2022, helps attract mainland and foreign companies in hi-tech and high-value industries to open offices in the city as a base for their regional and international expansion.

Oases provides target enterprises with tailor-made plans to help them launch operations in Hong Kong, assisting them with special facilitation measures covering aspects such as land, tax and financing. It also helps these companies’ staff and their families to settle in the city.

Zhang says Oases has also helped by connecting the company with important stakeholders and providing it with essential information and guidance about the specific Hong Kong government policies that were relevant to its needs.

“Because of Oases, we understand the latest policies of the Hong Kong government more directly, whether it’s Hong Kong’s innovation and technology development blueprint, new industrialisation and re-industrialisation measures, or various public institutions and government funding projects,” he says.

During last year’s Policy Address of Chief Executive John Lee, a HK$10 billion (US$1.3 billion) New Industrialisation Acceleration Scheme was announced. This provides financial help for enterprises working in the areas of advanced manufacturing and new energy technology, artificial intelligence (AI) and data science, and life and health technology. Such funding support bodes well for companies such as Neta Auto.

Zhang says Oases has also been crucial in helping his company connect with various business partners. “The automotive industry chain is very long, as it includes both hardware and software, from chips to cloud computing,” he says. “So there is a real need for partnerships. Oases’ support platform is very good for connecting these resources, sparking ideas and helping partners to work together on products.”

His company, founded in 2014, which focuses on producing intelligent new energy vehicles, has experienced impressive growth in recent years. In 2022, it became the first Chinese EV start-up to sell more than 150,000 vehicles a year – of which more than 3,000 were delivered to overseas customers.

Its entry-level Neta V, with a driving range of 301km (185 miles), sells in mainland China for 73,900 yuan (US$10,230). Last year, it launched four further models, which are priced about 100,000 yuan to 230,000 yuan. He says some models are popular for their spacious interiors, while others attract buyers with their intelligent features or sporty looks.

Zhang says the company’s success is not only a result of its affordable pricing, but also Neta paying close attention to its customers’ user experience. This year saw the launch of its latest model, Neta L, which is equipped with features such as an intelligent cockpit and autonomous driving, powered by transformative Lidar (light detection and ranging) sensors – technology that provides detailed 3D-depth maps of the car’s surroundings – as well as a fridge, television and zero-gravity seats.

The company has also achieved some important technological breakthroughs, Zhang says. “The energy density of our lithium batteries, for example, has increased from about 100 watt-hours per kg 10 years ago, to almost 300 watt-hours per kg now,” he says. “That’s nearly a threefold improvement. That means that at the same weight, the driving range can be doubled or tripled.”

As part of its plans to use Hong Kong as a launch pad to expand its business, Hozon Auto signed a memorandum of understanding last September to set up its international headquarters at Hong Kong Science Park, in Pak Shek Kok, New Territories.

The company will spend billions of yuan over five years to build a smart research and development (R&D) centre measuring tens of thousands of square feet and a big data centre in the city, which will employ hundreds of staff.

“Our Hong Kong R&D centre will develop customised and innovative EVs for customers in different markets, based on our successful models in mainland China,” Zhang says.

“It will also be able to leverage Hong Kong’s advantages in AI to develop some original modules or algorithms that can be reused on our global vehicle platform.”

He says the continuing influx of world-class innovation and technology (I&T) companies establishing offices in Hong Kong is a testament to the city’s strength as a business gateway for tech companies looking to expand in Asia and further abroad.

Last year, Hong Kong saw 382 companies from 45 economies – including 82 in the I&T sector – move to the city to either set up a new base or expand their existing presence, InvestHK, the government department responsible for direct foreign investment, reported in February.

Neta’s EVs are already moving into Southeast Asian markets, with the company having set up EV manufacturing plants in both Thailand and Indonesia, which are expected to begin mass production this year – delivering up to 30,000 vehicles per year. Another factory in Malaysia is expected to start production next January.

Customers in many of these Asian markets have already responded positively to its vehicles, with sales of the Neta V topping sales of EVs in Thailand last June, with more than 2,000 of the cars sold.

Neta’s vehicles are now available in 13 countries, with more than 20,000 EVs sold overseas last year. This year, it hopes to increase the number to 100,000 and expand sales in 60 countries, with plans to open up more manufacturing plants in the Middle East, Europe and the Americas.

“I am very confident that with Hong Kong’s advantageous resources and the product technology we have developed in the mainland Chinese market over the years, we can combine these areas of expertise to take the entire enterprise to a higher level,” Zhang says.

“Through our EV sales, we also hope to fulfil our corporate responsibility, playing our part in promoting a low-carbon lifestyle and contributing to environment protection.”