Zeekr and Neta implicated in China’s ‘zero-mileage’ EV sales scheme

Zeekr and Neta have been exposed as having their hands deep in the zero-mileage scheme that Chinese regulators are cracking down on. 

China’s EV industry is currently grappling with chronic overcapacity and a prolonged price war. As such, automakers have been resorting to increasingly desperate tactics to maintain growth, but government authorities are beginning to step in.

Chinese electric vehicle (EV) makers Zeekr and Neta have been exposed as participants in a growing sales inflation scandal, involving the manipulation of registration and insurance data to meet aggressive performance targets.

The two automakers reportedly registered vehicles as sold before they were delivered to customers, according to documents reviewed by Reuters and interviews with dealers and buyers.

Zeekr and Neta implicated in China’s ‘zero-mileage’ EV sales scheme

Between January 2023 and March 2024, Neta booked early sales of at least 64,719 vehicles, more than half of the 117,000 it claimed to have sold during that period.

Zeekr, a premium EV brand under Geely, reportedly used the same method in late 2024 in Xiamen, working with state-owned dealer Xiamen C&D Automobile. Sales receipts and interviews indicate that the insurance policies were registered under the names of the dealer’s subsidiaries, inflating Zeekr’s December sales numbers.

The company reported 2,737 cars sold that month in Xiamen alone, which is more than 14 times its average. However, city vehicle administration data showed only 271 cars were actually registered for license plates, casting doubt on the reported figures.

Shares of Geely Auto dropped as much as 4% in Hong Kong trading on Monday, marking the company’s biggest one-day decline in nearly a month.

Government and media scrutiny

The China Securities Journal, a major government financial newspaper, reported that Zeekr had been insuring vehicles before sale and highlighted customer complaints of deception and refusal of refunds. The paper questioned the sharp sales spikes in Shenzhen and Xiamen, suggesting they were artificially inflated.

In a social media post on Weibo, Zeekr acknowledged that the insured vehicles in question were intended for showroom display and claimed they remained legally “new.” The company did not directly address whether the cars were counted as retail sales, but it announced the formation of an internal investigation team.

Neta, owned by Zhejiang Hozon New Energy Automobile, has yet to comment publicly. According to one Neta dealer interviewed by Reuters, the company clearly informed dealers that insured vehicles should be considered sold. The dealer added that many of these cars are still sitting in warehouses unsold.

Neta’s financial troubles have mounted since 2024 and eventually resulted in its parent company entering bankruptcy proceedings last month. The brand’s annual sales fell sharply in 2023 to 87,948 units, down from 152,000 the previous year.

Public backlash is also growing. Last month, the People’s Daily, the official newspaper of China’s ruling Communist Party, published an editorial condemning the zero-mileage practice. This month, dealer associations in the affluent Yangtze River Delta urged automakers to revise sales targets and incentive programs, arguing that they were being coerced into falsifying sales data.

On Saturday, Auto Review, a publication under the China Association of Auto Manufacturers (CAAM), reported that the Ministry of Industry and Information Technology (MIIT) planned to impose a six-month resale ban on newly registered vehicles, but the publication retracted that claim on Monday, citing inaccuracies.

It clarified that MIIT and other departments were only planning to regulate the issue and “manage it from its source.”

The publication’s updated version also corrected statements regarding used car export regulations, originally saying a code system was proposed. It now states that a “relevant mechanism” will be developed, though no further details were provided.

Despite the correction, the article retained key claims that automakers such as Chery and BYD are planning to hold dealers accountable for pre-sale registrations.

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