Chinese EV Brands Under Fire for Inflated Sales Tactics

Documents reviewed by Reuters and interviews with dealers and buyers reveal that Chinese electric vehicle brands Neta and Zeekr inflated sales figures by insuring cars before they were sold. This allowed the companies to prematurely book sales and meet ambitious targets.

Neta reported over 64,000 early sales from January 2023 to March 2024, more than half its total sales for that period. Zeekr, a premium brand owned by Geely, employed similar practices to boost its numbers in Xiamen, China. The practice, prevalent due to intense competition and overcapacity in China's auto industry, is known as zero-mileage used car sales.

China's cabinet has pledged to regulate these methods, with state media highlighting them as damaging to the industry. As a result, authorities are coordinating with major industry players to curb this issue, signaling a crackdown on such sales tactics in the world's largest auto market.

(With inputs from agencies.)