Automobile companies Zeekr and Neta allegedly inflated sales figures by selling used cars with zero milesage on the odometer, according to recent reports.
China's Electric Vehicle Market Under Scrutiny: Neta and Zeekr Accused of Inflating Sales Figures
A recent report from Reuters and the China Securities Journal has shed light on controversial practices in China's electric vehicle (EV) industry, implicating prominent brands like Zeekr and Neta.
From January 2023 to March 2024, Neta prematurely recorded sales of at least 64,719 vehicles, according to the report. These vehicles were insured before delivery, often remaining unsold and physically stationary in warehouses or showrooms. This practice allowed Neta to inflate sales figures to meet aggressive sales targets amid intense market competition.
Similarly, Zeekr, a premium EV brand under Geely, employed the same tactic primarily in late 2024 through its main dealer in Xiamen. Insurance records revealed sales spikes where cars were insured — and thus recorded as sold — before actual customer sales or physical handover.
This practice takes advantage of Chinese industry registration policies, where insuring vehicles can count as sales, even if actual buyer delivery has not occurred. It has been used as a marketing and financial tool during a prolonged EV price war and in an oversaturated market, raising regulatory scrutiny from authorities and watchdogs.
Zeekr has publicly rejected allegations of declaring vehicles sold before customer delivery, explaining that vehicles were only insured to comply with mandatory motor insurance while displayed, with full transparency provided on sales platforms and no formal invoicing prior to actual delivery.
In Guizhou, Chongqing, and Guangzhou, some consumers found that the vehicles they purchased were already insured "used cars." Zeekr sold a large number of insured inventory vehicles as new cars under the guise of limited-time offers, sparking complaints, according to the China Securities Journal.
The findings indicate that pre-booking sales and selling "zero-mileage used cars" are notable and documented strategies among these brands, used to inflate sales figures in China's fiercely competitive EV market. However, such practices are controversial and under increased regulatory investigation.
| Aspect | Neta | Zeekr | |-----------------------------------|-----------------------------------|------------------------------------| | Period of prominent practice | Jan 2023 – Mar 2024 | Late 2024 | | Number of vehicles involved | ~64,700 vehicles (~50%+ of sales) | Thousands in Xiamen dealership | | Method | Insuring vehicles before sale | Same method via main dealer in Xiamen | | Vehicle status | Unsold, zero-mileage, warehouse/showroom cars | Zero-mileage showroom cars | | Company response | No public refutation mentioned | Denies declaring as sold before delivery, cites showroom insurance usage only |
The China Securities Journal featured this matter on its front page, underscoring the gravity of the situation. The practice of inflating sales figures reflects the intensely competitive nature of China's automotive market, where some automakers, under market competition pressure, prematurely recognize sales and revenue using "zero-mileage used cars" to mislead the capital market about the true supply and demand situation.
[1] Reuters, "Exclusive: China EV startups Neta and Zeekr inflate sales, Reuters finds," 2023. [2] China Securities Journal, "Neta’s sales inflated by pre-booking practice," 2023. [3] China Securities Journal, "Zeekr’s sales inflated by insuring inventory vehicles," 2024. [4] Zeekr press release, "Zeekr responds to allegations of declaring vehicles sold before delivery," 2024.
- Although Zeekr denies the allegations, the China Securities Journal claims Zeekr inflated sales by insuring inventory vehicles.
- In contrast to Zeekr's response, Neta is accused by the China Securities Journal of prematurely recording sales of over 64,700 vehicles in a questionable practice.
- The practice of insuring vehicles to artificially inflate sales figures has been a controversial strategy in China's electric vehicle market, according to Reuters.
- Due to this practice, some consumers purchased vehicles that were already insured as "used cars," causing complaints in Guizhou, Chongqing, and Guangzhou.
- Geely's premium EV brand, Zeekr, utilized this tactic primarily through its Xiamen main dealer, as reported by the China Securities Journal in late 2024.
- Neta's controversy and Zeekr's response are part of a broader issue within China's automotive industry, as some companies use "zero-mileage used cars" to mislead the capital market about the true supply and demand situation.
- The China Securities Journal highlighted the issue on its front page, suggesting increased regulatory investigation and scrutiny of these questionable sales tactics in China's EV market.
