Chinese electric vehicle makers Neta and Zeekr have been accused of inflating sales figures by registering vehicles as sold before they reached customers, according to documents seen by Reuters and interviews with dealers and buyers.
The practice allowed the companies to book sales early and meet aggressive monthly and quarterly targets by arranging insurance coverage for cars still sitting unsold. In China, vehicle sales can be counted once insurance is registered, creating a loophole exploited by several automakers.
Neta, a mid-market EV brand, reportedly used this method to pre-book sales for at least 64,719 vehicles between January 2023 and March 2024—more than half of the 117,000 cars it reported sold during that period.
Zeekr, a premium EV brand under the Geely Group, was also found to have engaged in similar tactics. The company used its main dealer in Xiamen, the state-owned Xiamen C&D Automobile, to register vehicles as sold in late 2024, despite them not having reached actual buyers.
Shares in Geely Auto, which is in the process of taking Zeekr private, dropped as much as 4% in Hong Kong on Monday, marking the steepest single-day decline since 26 June.
In China, automakers report wholesale sales to industry bodies, representing vehicles shipped to dealers. However, actual retail sales are tracked using insurance registrations. Vehicles pre-registered in this manner are known in the industry as “zero-mileage used cars”.
The controversial practice has gained traction amid intense competition and a prolonged price war in China’s oversaturated EV market. Now, it appears to have triggered a regulatory response.
State media and industry insiders have increasingly criticised such tactics, with China’s cabinet recently pledging to regulate what it called “irrational” market competition. Central authorities have also begun meeting with top automakers to express concern.
On Saturday, Auto Review, a publication affiliated with the China Association of Automobile Manufacturers, reported that the Ministry of Industry and Information Technology (MIIT) planned to ban the resale of vehicles within six months of their initial registration—a move widely seen as targeting this practice.
However, Auto Review later issued a correction, saying the report contained inaccuracies regarding the MIIT’s stance and that those sections had been removed.
In a rare step, Chinese state media also named Zeekr specifically on Saturday, accusing it of selling cars with insurance already purchased in order to inflate sales—signalling that Beijing may be taking a more aggressive stance on cleaning up the industry.
The unfolding scrutiny comes at a time when investor confidence in China’s EV market is already under pressure, raising fresh concerns about transparency, regulation, and market stability in the world’s largest auto industry.
