Two of China’s rising electric vehicle (EV) makers, Zeekr and Neta, are facing backlash after reports revealed they inflated car sales using a pre-insurance scheme.
Over 64,000 Neta vehicles were booked as “sold” between January 2023 and March 2024, despite not being delivered to real buyers, documents seen by Reuters show. Dealers say the brand insured the cars before sale to hit tough sales targets, a tactic that allowed early recording of sales under Chinese rules.
Zeekr, the premium EV unit owned by Geely Auto, used the same trick in December 2024 through its main dealership partner in Xiamen, reportedly selling over 2,700 vehicles in one month—14 times its normal rate. State media and buyers say many of these cars were never actually purchased by individuals at the time.
Zero-mileage cars, real-world consequences
The practice, known locally as “zero-mileage used cars,” has drawn strong condemnation from state media and industry regulators. “This way of whitewashing performance is not advisable,” said Li Yanwei of the China Automobile Dealers Association.
These tactics, used during a brutal EV price war and market glut, helped brands meet quotas and qualify for subsidies. Neta, whose sales plunged from 152,000 units in 2022 to just 1,215 in Q1 2025, is now in bankruptcy proceedings.
Government pushback, industry fallout
The Chinese government is now cracking down. The Ministry of Industry and Information Technology (MIIT) has reportedly discussed banning the resale of newly registered vehicles within six months to curb the abuse.
Geely, Zeekr’s parent firm, denied wrongdoing but said it had launched an internal probe. “Geely firmly rejects the report,” a spokesperson told Reuters. Zeekr said the insured vehicles were showroom units.
State-owned Xiamen C&D, which facilitated the Zeekr transactions, declined to comment. Industry data shows many of the reported sales were to companies, not individuals, adding to doubts about the true demand.
As state media turns its spotlight on these automakers, trust in the booming EV sector may suffer. In an intensely competitive market, honesty might become the rarest commodity.
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