China’s Zeekr, Neta under fire for inflating EV sales figures

Reports of sales figure manipulation have sent shockwaves across China's EV market. Two prominent Chinese electric vehicle makers, Neta and Geely’s Zeekr, have been allegedly caught inflating sales figures to meet aggressive targets, as per a Reuters investigation. The companies allegedly booked cars as “sold” by purchasing insurance policies before handing them over to customers, a loophole that allowed them to report higher sales without actual buyers.

The scheme is reportedly widely used in China’s hyper-competitive auto market, highlighting growing concerns about unethical sales practices in the country’s booming EV sector.

Neta’s inflated sales crossed 64,000 units

According to documents reviewed by Reuters and testimonies from dealers and customers, Neta reported early sales of at least 64,719 vehicles between January 2023 and March 2024. That figure represents more than half of the 117,000 vehicles it claimed to have sold during the period.

The EV startup, owned by Zhejiang Hozon New Energy Automobile, achieved this by pre-purchasing insurance policies for unsold cars and registering them as sold. This practice is permissible under China’s car registration rules, which allow sales to be recorded once a vehicle is insured.

A dealer affiliated with Neta, speaking anonymously to Reuters, confirmed that, “in Neta’s case, the company made it clear to dealers that the cars were insured ahead of time and therefore counted as sold". The dealer added that many of these zero-mileage vehicles still sit unsold in warehouses.

Zeekr also named in state media exposé

China's premium EV brand under Geely Auto, Zeekr reportedly used the same strategy in late 2024. According to dealers and sales documents seen by Reuters, Zeekr worked with Xiamen C&D Automobile, a state-owned dealership operator, to register cars under the company’s name and claim them as sales.

A buyer in southern China told Reuters that, “the Zeekr salesman said the car would be 3,000 yuan cheaper and I’d also get a 10,000 yuan charging coupon.”

China’s state-run China Securities Journal recently confirmed the story, saying Zeekr had indeed sold vehicles that were already insured before buyers took delivery. The publication interviewed customers who discovered, after the fact, that their cars were not insured in their name and were denied refunds.

‘Zero-mileage used cars’ under scrutiny

These pre-registered cars are known as “zero-mileage used cars” in Chinese auto parlance, technically used, yet never driven. This tactic, while not illegal, has reportedly come under intense scrutiny amid a brutal price war and overcapacity in China’s EV market.

According to the People’s Daily, the Communist Party’s official mouthpiece, such practices distort market data and hurt consumer trust. The paper published a scathing editorial last month condemning the “zero-mileage” model.

Adding to the pressure, four dealership associations in the wealthy Yangtze River Delta recently appealed to automakers to set realistic sales targets, warning that sales staff were being “forced to falsify performance”.

Neta’s fall from grace and financial woes

Neta’s alleged manipulation began in late 2022, reportedly to secure state EV subsidies before they expired. While the brand hit a sales peak of 152,000 units in 2022, its figures plunged the following year. By the first quarter of 2025, it had sold just 1,215 vehicles, according to the China Association of Automobile Manufacturers (CAAM).

As per state media, its parent firm, Zhejiang Hozon has now entered bankruptcy proceedings.

Government crackdown looms

China’s Ministry of Industry and Information Technology (MIIT) is reportedly preparing a crackdown on the “insurance-first” sales strategy. According to an industry publication under the China Association of Auto Manufacturers, new rules may ban vehicles from resale within six months of registration, which is a direct response to the zero-mileage loophole.

While Geely denied the China Securities Journal report through a spokesperson, it declined to comment on Reuters’ findings. Zeekr, Neta, and Xiamen C&D did not respond to requests for comment.

As the world’s largest EV market faces a reckoning, Chinese regulators are under pressure to restore credibility and transparency, before the sales race becomes a full-blown scandal.