Chinese EV companies Zeekr Intelligent Technology Holdings Ltd. ZK, owned by Geely Automobile Holdings Ltd. GELYY GELYF and Neta Auto, reportedly inflated sales data to hit aggressive sales targets.
What Happened: The companies used China's insurance scheme by booking cars for insurance before they were sold to buyers, with Neta using this method on over 64,719 units from January 2023 to March 2024, Reuters reported on Sunday.
Neta reported 117,000 units sold during those 15 months, while Zeekr adopted the same method in 2024 through state-owned dealer Xiamen C&D Automobile, in the city of Xiamen, the report suggested.
Vehicles being reported as sold by insuring them before they reach the customers are known as "zero-mileage used cars," and the practice has emerged following cutthroat competition due to China's EV price war.
Neta dealers were informed by the company that the cars were insured beforehand and therefore “counted as sold,” a dealer cited in the report said. “We had to explain to buyers that the traffic insurance was complementary and remind them it would expire earlier and should be renewed on time,” the dealer said. However, Neta customers interviewed in the report said they weren’t informed by the dealers.
Zeekr and Neta did not immediately respond to Benzinga’s request for comment.
On the other hand, Zeekr's methods were reported by Chinese state media, which the Reuters report says is a first instance of specific manufacturers being named by the CCP amid aggressive competition in the domestic automobile market dubbed the “EV price war.”
"Geely firmly rejects the report put forward by the China Securities Journal," a spokesperson for the company said in the report after the China Securities Journal, a major state-run financial publication, interviewed Zeekr owners who were refused refunds after finding their cars already had insurance before being sold to them.
The China Securities Journal also reported that Zeekr sold 2,737 units in December in Xiamen, 14 times more than the monthly average sales for Zeekr. The report also suggests Zeekr registered 271 units sold to individual customers out of the 2,737, while the rest were sold to companies.
"The Zeekr salesman said the car would be 3,000 yuan ($420) less than a car I would get from the store and I would also get a charging coupon worth 10,000 yuan," a customer cited in the report said.
Why It Matters: The news comes as the Chinese EV price war has invited new criticism from Beijing, with the government vowing to regulate the "irrational" competition currently taking the domestic auto industry by storm.
The government had previously raised concerns about the fierce competition in the industry, urging companies to also clear dues to the suppliers within 60 days by introducing a regulation in March, which came into effect in June.
Elsewhere, amid the EV price war, Tesla Inc. TSLA has reported a rebound in Chinese sales during the second week of July after the company experienced lackluster sales figures when the month began.
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