China's Zeekr, Neta accused of faking EV sales with insurance

Chinese EV makers Neta and Zeekr are accused of inflating sales figures by insuring vehicles before they were sold.

Neta reportedly used this method for at least 64,719 vehicles between January 2023 and March 2024. It’s over half of its reported 117,000 sales.

Zeekr, owned by Geely, allegedly engaged in similar practices in late 2024, particularly in Xiamen through its main dealer, Xiamen C&D Automobile.

This practice, known as “zero-mileage used cars,” allows vehicles to be counted as sold once they are insured and registered, even if unsold.

Analysts believe it’s a tactic to meet sales targets amid overcapacity and a price war.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Sales inflation reveals cracks in China’s EV metrics framework

The revelation that Neta booked early sales of 64,719 cars (more than half their reported 117,000 vehicle sales during that period) exposes significant vulnerabilities in how China’s EV industry performance is measured.

This practice exploits the gap between two key industry metrics: wholesale numbers (automaker-to-dealer) versus retail data from insurance registrations, creating a misleading picture of market demand.

The discrepancy between Zeekr’s reported 2,737 sales in Xiamen in December versus only 271 cars actually registered for license plates demonstrates how dramatically these numbers can diverge.

Such inflated figures impact everything from investor valuations to market share calculations, with the automotive industry association explicitly questioning these “anomalies” in sales reporting.

This manipulation highlights why China’s auto industry needs more transparent reporting frameworks, as companies have found ways to meet aggressive targets without actual consumer purchases.

2️⃣ Overcapacity drives increasingly desperate business practices

China’s EV sector exhibits classic signs of market oversaturation, with the “brutal, years-long price war caused by chronic overcapacity” explicitly driving companies toward questionable business practices.

The pressure is particularly evident in dealer relationships, with four dealer associations from the Yangtze River Delta region publicly urging automakers to set more reasonable sales targets and stop forcing dealers to falsify sales.