Trouble in China: Court Orders Zotye to Dismantle Production Lines Over Debt, Automaker Can No Longer Build Cars

Zotye Auto can no longer manufacture cars after a local court ordered the dismantling of its T300 assembly line in Chongqing due to unpaid debts. With the equipment removed, the company has no way to continue production of its core T300 model, leaving the brand’s future in jeopardy. As of the first quarter of this year, Zotye’s debt load had reached a critical 96.1% of total assets.

The automaker’s financial troubles stretch back more than six years. Over that period, Zotye racked up losses totaling 255 billion yuan ($35.7 billion), driven by collapsing demand and management’s failure to adapt to changing market conditions. In May, several top executives received formal warnings from China’s securities regulator for submitting false financial statements between 2021 and 2024.

Preliminary figures show Zotye lost between 1.35 billion and 2 billion yuan ($189 million–$280 million) in the first half of 2025. That’s down from last year’s 2.59 billion yuan ($362.6 million) loss—but only because the company had no production at all, not because of any real recovery. Zotye has admitted it lacked the funds to restart even a single assembly line this year.