Two Chinese electric vehicle (EV) brands, Neta and Zeekr, have come under scrutiny for allegedly inflating their sales figures using a questionable insurance scheme to meet aggressive sales targets. According to documents reviewed by Reuters and interviews with dealers and buyers, the companies pre-registered vehicles as sold by insuring them before they were delivered to customers an industry loophole that allowed them to report early sales.
Between January 2023 and March 2024, Neta reportedly used this method to book early sales of at least 64,719 vehicles—over half of the 117,000 cars it claimed to have sold during that 15-month period. Zeekr, a premium EV brand under Geely, was found to have implemented a similar strategy in late 2024, particularly in Xiamen, where its reported sales in December spiked dramatically to 2,737 units over 14 times its monthly average.
This practice, known in the industry as registering “zero-mileage used cars,” has emerged from intense competition in China’s overcrowded EV market. Manufacturers are under pressure to maintain growth amid a prolonged price war and overproduction, which has prompted some to manipulate sales records.
Chinese state media and regulatory bodies have taken note. The China Association of Auto Manufacturers recently announced that the industry ministry is planning to curb this practice by banning cars from being resold within six months of registration. The China Securities Journal also raised flags over suspicious spikes in sales reported by both Neta and Zeekr.
Li Yanwei of the China Automobile Dealers Association criticized the scheme, saying on Weibo, “This way of whitewashing performance is not advisable.” Analysts believe these artificial sales numbers may have been aimed at boosting financial statements or investor confidence.
While some of these zero-mileage cars are exported and sold as used vehicles abroad, many are sold domestically at discounts, often leaving buyers unaware that the vehicles were previously registered, affecting insurance and resale value.
As regulators prepare to intervene, the scandal may trigger wider reforms in China’s booming but turbulent EV market. Neither Zeekr, Neta’s parent company Hozon, nor state-owned dealer Xiamen C&D have responded to the allegations.
