China’s Zeekr and Neta boosted EV sales through insurance scheme

EV sales trick under fire

Zeekr and Neta, two rising electric car companies in China, are being accused of using shady tactics to make their sales look better. Reports say they insured cars before actually selling them, tricking people into thinking the cars were bought.

This move gave them higher numbers on paper. But behind those numbers, many cars never left the showroom.

The zero-mileage scheme explained

This sales trick is called the “zero-mileage” scheme, and it’s all about appearances. Companies insure and register cars even though no customer has paid for them.

The cars are then counted as sold, which looks great in reports. But the truth is, they are still sitting in warehouses, untouched and unsold.

Neta’s massive numbers raise questions

Between January 2023 and March 2024, Neta booked at least 64,719 early sales, over half of the approximately 117,000 units it reported during that period, based on internal documents and dealer testimony.

These numbers helped Neta appear successful, but the truth is much less impressive. It’s a major red flag for anyone watching the EV market.

Zeekr’s Xiamen move shocked experts

Zeekr, part of the Geely group, used the same scheme in the city of Xiamen in late 2024. Zeekr reported 2,737 sales in Xiamen during December 2024, but vehicle administration data showed that only 271 units were registered for license plates during that month, revealing a significant gap between reported and actual retail deliveries.

This huge gap made experts question how honest the company had been with its numbers.

Inflated sales shake investor trust

When sales numbers don’t match actual car registrations, it causes big problems for investors. Investors rely on clean, honest numbers to make smart decisions.

If the data is fake, their money can go into risky places. This loss of trust hurts the company’s image and affects the entire EV market.

Dealers speak out about pressure

In interviews with Reuters, several dealers reported being instructed by Neta to book vehicles as sold, even if unsold, one dealer recalled being told, ‘Just do it, everyone else is doing it,’ under pressure to meet targets.

That kind of pressure left dealers feeling stuck. Many followed orders just to avoid trouble, even if it didn’t feel right.

Overcrowded market leads to bad habits

China’s electric car market has too many companies fighting over too few buyers. This created a tough price war where companies cut prices just to survive.

To keep sales numbers high, some began using fake reporting tricks. Instead of real growth, many companies are now just trying to look good on paper.

Zeekr faces customer complaints

Zeekr said some insured vehicles were only meant for showrooms, not for sale. But buyers later found out their “new” cars already had insurance before the purchase.

Many customers felt fooled and asked for their refunds, but were turned down. This led to growing anger and mistrust in the brand.

China’s government steps in

Chinese industry bodies and media have called for regulatory action, including reports suggesting a ban on resale within six months of registration.

However, later clarifications indicated that the Ministry of Industry and Information Technology plans to ‘manage the issue from its source’ rather than implement a formal ban at this stage.

This change aims to stop automakers from using fake registrations to boost numbers. The government hopes it will bring more fairness and honesty to the EV market.

National media calls out bad actors

Major news outlets in China have named Zeekr and Neta in their reports. Papers like China Securities Journal and People’s Daily are highlighting the sales tricks.

Their stories have opened the public’s eyes to these shady practices. Government and media pressure are pushing the auto industry to clean up its act.

Dealer groups demand fairness

Dealers in the Yangtze River Delta region are speaking up against dishonest targets. They say automakers push them to meet goals that require fake numbers.

These dealer groups are asking for reasonable sales plans and real support. Their message is clear: stop forcing us to cheat just to survive.

Insurance data uncovers the truth

Insurance records don’t lie, and they’re now exposing false sales reports. Even if a company claims a car is sold, insurance data shows whether someone actually owns it.

Analysts now use this information to tell real trends from fake ones. It’s one of the strongest tools to catch false reporting.

Neta’s tricks started early

A Neta dealer said the company started this trick in 2022 to claim government subsidies. The company rushed to register cars to meet the deadline, even though they weren’t sold.

This helped the numbers look better for a short time. But the move didn’t fix deeper problems inside the business.

Faked cars sold outside China

Some of the cars marked as sold in China were later shipped to other countries and sold as “new” vehicles. But these cars had already been insured and registered, making them technically used.

Buyers in places like Europe or Southeast Asia often didn’t know this until problems with warranties showed up. This mistake hurt trust in Chinese EVs and raised questions about international sales practices.

Stay tuned for more. Geely’s Zeekr may ditch its public plans once more amid rising scrutiny.

Social media drives public anger

Buyers who felt tricked started sharing their stories on social media, where the posts spread quickly. Many said their “brand-new” cars came with insurance that started months before they bought them.

These online stories drew public attention and caused a major backlash against the automakers. The growing anger made it harder for companies like Zeekr and Neta to hide what happened.

Don’t miss what’s next. Ram confirms launch of compact unibody pickup truck for North America, adding to the competitive storm.

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This slideshow was made with AI assistance and human editing.