Over the past few years, Chinese automakers have become synonymous with rapid growth, but now some of that success is under a microscope. The government’s Ministry of Commerce recently summoned a handful of companies—among them the electric vehicle giant BYD—to explain why they’ve been registering brand-new cars as used. This so-called “zero-mile” or “pre-owned” registration trick allows manufacturers to hit monthly sales targets without actually moving a single vehicle off the lot.
Here’s how it works: a fresh-off-the-production-line car gets registered internally, then sits idle in a dealership or fleet until it’s finally sold—often at a steep discount—to a real customer. From a numbers perspective, the sale counts instantly, inflating the brand’s figures while leaving the actual consumer base unchanged. BYD, along with peers like Dongfeng and Chery, now faces allegations of padding their annual totals purely on paper. Industry insiders warn this kind of behavior distorts market trends, misleads investors and erodes trust among genuine EV buyers.
Global Echoes: Europe’s Tactical Sales
Believe it or not, this isn’t a China-only phenomenon. Across Europe, automakers have long leaned on “tactical sales” to juggle regulatory hurdles and sales targets. You might recognize them as demo cars, courtesy vehicles or short-term rentals that rack up a few miles before being sold at a markdown. While technically “used,” these low-mileage models blur the line between new and second-hand sales. In some markets, over a quarter of EV registrations are in fact these so-called “ghost” vehicles, quietly boosting numbers just in time for quarterly reports.
Beyond skewing public perception, Europe’s playbook serves an important financial motive. Automakers that exceed CO₂ emission limits face heavy fines under the EU’s CAFE regulations. By transferring demo vehicles into the customer-owned pool, companies can lower their average fleet emissions on paper, avoiding penalties. Critics argue this tactic cheats the system and undermines the green goals policymakers are trying to enforce. Meanwhile, genuine buyers hunting for a fair deal face confusion over what constitutes a truly “new” EV in the showroom.
Beijing’s Clampdown: A New Era of Accountability
China’s official intervention is surprising for its swiftness and severity. In calling in top executives last May, regulators made clear they won’t tolerate artificial inflation of sales numbers. According to Reuters, some 3,000 to 4,000 sellers on second-hand platforms were implicated in off-the-books registrations. That adds up to potentially tens of thousands of vehicles whose sales were never really “real.” With Beijing’s heavyweight crackdown, the government aims to protect consumer trust and maintain market stability as EV adoption accelerates.
But enforceable rules are just one side of the equation. The Ministry of Commerce is also considering new auditing protocols, random dealership inspections and harsher penalties for executives caught manipulating figures. Early signs suggest that some brands have begun to self-report irregularities, hoping to dodge the heaviest sanctions. Investors, long dazzled by growth charts showing China’s homegrown automakers outpacing global rivals, are now watching closely. Any dent in reported sales could reverberate through stock valuations and reshape partnership deals with overseas distributors.
What’s Next for the EV Market?
The fallout from these revelations will ripple across the global auto industry. For BYD, the stakes are particularly high: the company and Tesla have been neck and neck in monthly delivery tallies, each claiming the title of world’s top EV seller. If China’s largest auto market demands rigorous transparency, we could see a recalibration of who truly leads in volume and valuation. Smaller players might struggle to navigate the tightening rules, potentially ceding ground to those with cleaner practices.
Consumers, too, stand to benefit if the dust settles in favor of honest reporting. A transparent environment encourages fair competition, better pricing and genuine after-sales support. Ultimately, the campaign against artificial sales padding underscores a bigger trend—EVs are maturing from a darling of tech hype into a mainstream industry where trust, reliability and accountability matter more than ever. Buckle up, because the journey to a truly transparent electric car market has just begun.
