Zeekr, Neta inflated EV sales using insurance tricks

Chinese electric vehicle brands Neta and Zeekr ZK.O inflated sales in recent years to hit aggressive targets. The companies arranged for cars to be insured before they were sold to buyers, documents show, enabling them under Chinese industry car registration practices to book sales early so they could hit the monthly and quarterly targets, the dealers and buyers said.

Neta booked early sales of at least 64,719 cars through this method from January 2023 to March 2024, according to copies of records it sent to dealers. That was more than half the sales of 117,000 vehicles it reported over the 15 months. Zeekr, a premium EV brand owned by Geely, used the same method to book early sales in late 2024 in the southern city of Xiamen through its main dealer there, state-owned Xiamen C&D Automobile., according to dealers, buyers and sales receipts.

Aggressively chasing vehicle sales

Vehicles booked as sold before reaching a buyer are called “zero-mileage used cars” in the Chinese auto industry. The practice has emerged out of cutthroat competition for sales in the world’s largest auto market, which is reeling from a brutal, years-long price war caused by chronic overcapacity. In a competitive environment, a price war occurs where company rivals lower prices in an attempt to gain more market share. This aggressive pricing strategy can end up leading to numerous rounds of price reductions.

On Saturday a publication run by the China Association of Auto Manufacturers said the industry ministry was planning to clamp down on the practice by banning cars from being resold within six months of being registered as a sale. In a front-page story, the China Securities Journal newspaper interviewed Zeekr car buyers in cities such as Guangzhou and Chongqing, who the newspaper said had found that their cars already had insurance policies before they were sold. They said they were refused refunds, even though they felt they were deceived.

Upcoming perspectives on China’s EV market

Analysts and investors tracking China’s auto industry gauge performance and estimate inventory levels with two sets of sales data. Wholesale numbers reported by automakers to the industry association show sales from automakers to dealers, while retail data compiled from insurance registration records show the sales to users.

Some zero-mileage used cars are exported to be sold as second-hand cars overseas, but analysts and dealers say the domestic sales volume is significantly higher, with Chinese customers nationwide buying what they believe to be discounted new vehicles, only to find out later their car is not insured under their name.

This month four dealer associations based in the wealthy Yangtze River Delta urged automakers to set them more reasonable sales targets and incentive policies, saying, without providing details, that dealers were being forced to falsify sales. The Yangtze River Delta is a very significant industrial region for China. Not only renowned for its economic vitality, it has also morphed into a thriving automotive cluster.

Neta’s sales peaked in 2022 when it was ranked as the eighth-largest maker of new EVs in China with sales of 152,000 vehicles. Sales fell last year to 87,948 vehicles, including 23,399 exported, and it sold 1,215 cars in the first quarter of 2025, according to data from the China Association of Automobile Manufacturers. The prognosis for the electric vehicle market in China for the coming year seems promising. A lot of varying factors during 2024 escalated fears that the EV market would take a downturn, which didn’t quite pan out that way. Analyst predictions in turn have a good forecast for 2025.

GCN.com/REUTERS.