China EV brands Zeekr, Neta inflated car sales with insurance scheme
Recent documents and interviews with dealers and buyers reveal that Chinese electric vehicle brands Neta and Zeekr inflated sales by booking early sales through an insurance scheme. Neta, for example, booked over 60,000 cars in this manner from January 2023 to March 2024, more than half of its reported sales over 15 months.
Similarly, Zeekr, a premium EV brand owned by Geely, used the same method to boost sales in late 2024 in Xiamen. The industry’s cutthroat competition and overcapacity have led to the emergence of practices like booking “zero-mileage used cars” to meet aggressive targets.
The Chinese government is now taking steps to regulate such practices, with the industry ministry planning to ban cars from being resold within six months of registration as a sale. State media has also highlighted the issue, with specific automakers like Zeekr being called out for selling cars with pre-purchased insurance to inflate sales.
Analysts believe that these practices are aimed at embellishing financial reports and meeting performance goals, but they come with risks for both the industry and buyers. The pressure on dealers to meet unreasonable sales targets has led to falsification of sales data in some cases.
Ultimately, the industry is facing a reckoning as regulators crack down on these deceptive practices. The financial troubles faced by Neta and its owner, Zhejiang Hozon New Energy Automobile, highlight the consequences of such actions in the world’s largest auto market.
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