Challenges Faced by Over One Million Electric Vehicle Owners in China Due to Failed New Energy Brands

The issue of unfinished electric vehicles is troubling over a million car owners. When Nezha Auto officially entered bankruptcy proceedings in June 2025, many owners realized that the warranty promises made at the time of purchase had become worthless. “The 4S shop has no parts available, and repairs can only be done at independent repair shops at our own expense,” said a car owner using the pseudonym Gao Chang.

As Nezha Auto struggled with operational difficulties, numerous 4S shops across various cities and regions suspended their services in 2025. Even the locations still operating could not provide after-sales services such as maintenance or repairs. Currently, more than 400,000 Nezha Auto owners are facing issues like warranty expiration, difficulty finding parts, and even insurance companies refusing coverage.

Earlier, owners of WM Motor faced similar challenges. Over the past decade, China’s new energy vehicle industry has experienced a tumultuous shift from rapid growth to a more rational market correction. Brands like WM Motor, HiPhi, and Nezha have left behind not only empty factories but also thousands of owners grappling with after-sales service problems. According to incomplete statistics from First Financial, the collapse of car manufacturers in the last ten years has affected millions of car owners, with the after-sales responsibilities that were once the companies’ now becoming a significant burden for the owners.

The warranty system has collapsed, leaving owners without repair options. In September of this year, several Nezha Auto owners received notifications that the vehicle networking services had been terminated. When they purchased their cars, Nezha Auto had promised free 5G data for life or for five years. However, due to the termination of services, owners can no longer utilize features like remote control and in-car entertainment. The lack of internet has even prevented them from unlocking their car doors, forcing them to purchase data out of pocket. “Buying data myself is a minor issue; the real problem is that the car is still under warranty, but now I can’t reach the manufacturer or get parts from the 4S shop. I have to pay for repairs myself,” Gao Chang explained.

After the manufacturers halted operations, authorized repair networks across the country began to close. Although some owners can still find repair shops in certain areas, all maintenance services are now at their own expense. Moreover, some automotive brands that previously used lifetime warranties as a marketing strategy have seen these promises evaporate. “In reality, the lifetime warranty from manufacturers typically comes with conditions, such as limiting annual mileage to under 30,000 kilometers, which are common constraints,” said automotive after-sales expert Song Quanye. “For bankrupt companies, these conditions have become meaningless, and even basic warranty services are unavailable.” After a company closes, the authorized service network collapses entirely, warranties become void, and there is no one responsible for after-sales support, forcing owners to seek repairs at independent shops at their own cost, without any guarantees.

Song Quanye noted that compared to traditional fuel vehicles, new energy vehicles generally require less frequent maintenance and incur lower costs. For instance, Tesla has been widely available in China for five to six years and has only recently started to see increased maintenance needs as some vehicles go out of warranty; for the past five years, Tesla owners have spent very little on maintenance. Consequently, there are fewer repair shops specializing in after-sales services for new energy vehicles. “Fuel vehicles need oil changes every 5,000 to 10,000 kilometers, and brake fluid, coolant, and spark plugs need to be replaced every 20,000 kilometers, leading to annual maintenance costs of around 2,000 yuan. In contrast, new energy vehicles have little other than charging costs,” Song Quanye explained. Most new energy vehicle owners do not engage in regular maintenance, but manufacturers, aiming to sell cars, promised some free basic maintenance to keep customers returning to the dealership. These projects are low-cost and typically do not require owners to spend money. However, due to the heavier bodies of new energy vehicles and the sensitivity of their start-stop and braking systems, the wear on the chassis is faster, leading to higher chances of damage. The cost to replace the chassis is similar to that of a fuel vehicle, representing a significant expense for new energy vehicle owners.

It has been observed that after a certain new energy company went bankrupt, many owners chose to forgo basic maintenance payments. However, some owners had previously purchased extended warranties, leading to even greater losses of their rights. It is important to note that the competition in the new energy vehicle market is fierce. Manufacturers implement policies to secure 4S shops, creating a level of exclusivity. Maintenance also faces considerable safety or technical risks, discouraging many repair shops from participating. To obtain authorization for new energy maintenance, a shop must meet specific qualifications, often requiring an investment of over 5 million yuan, even reaching around 10 million yuan, which is typically beyond the means of ordinary repair shops. Additionally, the return on investment is long-term and fraught with uncertainty.

“With the closure of new energy companies, the authorization system has collapsed. Repair shops no longer face the risk of being sued, and many independent repair shops have taken on this business. However, the quality of these shops varies widely, and costs are not transparent. With no alternative, owners have no bargaining power, resulting in high repair costs,” Song Quanye commented. Some owners jokingly refer to themselves as “sheep waiting to be slaughtered.”

“The mainboard of the power battery has issues, and the car won’t start. When I asked for a quote at a repair shop, they charged 1,000 yuan just to open the battery and inspect it without making any repairs,” said a car owner named Liu Shan. Liu purchased a Nezha V four years ago, and although the car is still under warranty, he now has to pay out of pocket for repairs. The time taken to diagnose and repair the vehicle has stretched to a month. Initially, he went to a local repair shop for diagnostics and was told that the battery had to be opened to identify the problem. After agreeing, it took 15 days for an inspection, and the final quote was 6,000 yuan. “If it can’t be fixed, I’ll be without a car. As a car owner, it feels like I’m just waiting to be slaughtered, with no room for negotiation,” Liu said. He found the local repair shop’s expertise and pricing unreasonable and eventually turned to a repair shop in another city, where, after towing and further diagnostics, he managed to get the car repaired for 4,000 yuan.

The challenges of high repair costs and difficulty finding services after a manufacturer’s closure reflect the real feelings of car owners. For minor repair issues, some owners even choose to do it themselves or purchase parts online to take to repair shops. “Changing a wheel bearing at a repair shop costs 450 yuan, but if I buy the bearing myself for 40 to 50 yuan, plus 150 yuan for labor, it’s much cheaper,” a car owner noted. In mutual assistance groups, car owners seek repair solutions from each other, and many have adopted this method, even searching online for tutorials to fix their cars themselves.

According to Song Quanye, after a car manufacturer goes bankrupt, repair shops primarily source parts from three categories: original parts from suppliers that were initially procured by the manufacturer, which may still be available; used parts salvaged from scrapped vehicles; and leftover parts from closed 4S shops that remain in the supply chain. However, there are also some aftermarket parts available, although these are generally scarce for new energy vehicles. “Aftermarket parts are only present for models with a large market share, as production depends on volume to cover costs and generate profits. Models from bankrupt new energy manufacturers have low market penetration, making it unlikely for anyone to produce aftermarket parts, and even if they do, the low volume leads to no profit,” Song Quanye added.

Investigations by First Financial revealed accounts on social media platforms like Douyin advertising specialized repairs for WM vehicles. Song Quanye stated that these so-called “specialized repair shops” are mostly marketing gimmicks and are not officially authorized. These services are only a small part of the offerings of general repair shops. “It’s not feasible to rely solely on repairing vehicles from bankrupt manufacturers for survival; it can only serve as an additional service for repair shops. In any given city, there are only a handful of such models, and some are willing to take on the work for extra income. Since owners have no other options, they often have to accept high repair shop prices without any room for negotiation,” Song Quanye explained. The limited choices and difficulty in sourcing parts naturally lead to higher repair costs, as car owners have no alternatives.

Song Quanye noted that the current industry’s unspoken rules in repair shops are hard to avoid, mainly due to the difficulty in acquiring quality parts from bankrupt manufacturers. “After a manufacturer closes, no one is left to maintain the servers. Companies like WM, which have officially declared bankruptcy, shut down their servers, preventing third-party repair shops from legally conducting battery diagnostics and other related services. Previously, repairs through system hacking might result in accountability, but now, with the manufacturer gone, there is no one to hold accountable,” he added.

Furthermore, it is noteworthy that after Guangzhou Automobile’s FCA exited the market, the Stellantis Group promised to continue providing after-sales services and maintenance, and Guangzhou Mitsubishi owners can still obtain parts support through affiliated parties. However, the situation differs for new energy companies after bankruptcy. “Fuel vehicle manufacturers have been in the market for many years, and the dynamics between manufacturers and insurance companies have been established over decades, leading to high compatibility of parts and sufficient competition, resulting in relatively reasonable prices. In contrast, the after-sales competition for new energy vehicles is not intense, and manufacturers have not opened up authorization, allowing them to maintain high parts prices through a closed system,” Song Quanye noted.

However, platforms like Tuhu and Tmall are beginning to focus on specialized repairs for new energy vehicles, aiming to lower technical barriers through standardized services. Some traditional repair shops are also transitioning to “dual fuel” repairs, introducing diagnostic equipment for new energy vehicles. Nevertheless, the overall landscape of the new energy vehicle repair industry is still awaiting better regulatory support.