China’s booming electric vehicle industry is facing heightened regulatory pressure after it emerged that leading carmakers Neta and Zeekr recorded 10s of thousands of vehicles as sold, despite those vehicles never reaching buyers, according to a report by Insurance Business Magazine.
Insurance Business Magazine claims documents reviewed by international media, and corroborated by accounts from dealers and customers, reveal that both brands used pre-emptive insurance registrations to book vehicles as retail sales. The tactic allowed manufacturers to meet ambitious targets in a fiercely competitive market but has triggered alarm among Chinese authorities and industry watchdogs.
Neta, the electric marque owned by the financially troubled Zhejiang Hozon New Energy Automobile, is reported to have pre-insured more than 64,000 vehicles between January 2023 and March 2024. That figure accounts for over half of its officially declared sales in that time.
Zeekr, a premium electric brand under the Geely Auto banner, adopted a similar practice in the southern city of Xiamen. There, insurance records show a sharp rise in sales in December last year – 2,737 vehicles were booked as sold, more than 14 times the monthly average.
Industry sources say cars were insured and recorded as sold before being physically delivered to customers, or in some cases, before being matched with a buyer at all. These vehicles, often referred to as “zero-mileage used cars,” remained in warehouses or showrooms.
In a statement posted to Chinese social media platform Weibo, Zeekr said the pre-insured vehicles were intended for showroom display and remained “legally new”. It has since launched an internal review. Neta has not issued a formal response. Its parent company entered bankruptcy proceedings last month.
The full report can be found here