Zero-mileage used cars: The hidden danger in China’s electric vehicle boom.

The scandal of zero-mileage used cars: How China’s EV market put profit over public safety

In a nation once hailed for spearheading the global electric vehicle (EV) revolution, a dark undercurrent is now tarnishing China’s automotive credibility. The emergence of “zero-mileage used cars” vehicles registered as sold but never driven has ignited a major scandal that goes beyond mere market manipulation.

This scheme not only exposes widespread subsidy fraud but also presents a serious safety threat to global consumers, particularly in less regulated markets where many of these vehicles are now being exported.

This article outlines the full extent of the crisis, the mechanisms behind the fraud, its implications for consumer trust and safety, and why the fallout will be felt far beyond China’s borders.

What are zero-mileage used cars?

“Zero-mileage used cars” are vehicles that appear on used car markets but are essentially brand new. These vehicles have been registered and often plated but have never seen actual use. Their creation is tied to a strategy that allows Chinese automakers and dealers to report inflated sales, claim government subsidies, and quietly offload unsold inventory at reduced prices.

How the scheme works

The scandal centres around a five-step process that is both financially beneficial and dangerously deceptive:

Automakers “sell” new EVs to dealers on paper.
Dealers register these cars, making them eligible for subsidies.
Government subsidies are claimed, even though no end-user purchase occurred.
Cars are then re-listed on used car platforms as “secondhand” vehicles, despite having zero mileage.
Consumers purchase these vehicles at reduced prices, unaware of the vehicle’s true nature or safety compromises.

This practice inflates sales figures for automakers and facilitates large-scale abuse of government EV incentives, originally intended to support genuine buyers and manufacturers committed to innovation.

Why this happened: Subsidies, competition, and pressure

China’s push to dominate the EV industry was supercharged by generous state subsidies and regulatory targets. From 2020 to 2024, the government poured billions of dollars into EV grants to accelerate adoption and foster homegrown champions like BYD, Nio, and Xpeng.

However, as over 100 EV manufacturers entered the fray, a fierce price war ensued. Companies scrambled to meet investor expectations, quarterly targets, and state compliance thresholds, often with little regard for sustainable business practices.

To meet sales quotas and qualify for subsidies, automakers began “selling” inventory to affiliated dealers. These vehicles were never meant for actual consumers. In some cases, they were built solely to qualify for state subsidies before being parked indefinitely in storage yards until now.

Safety shortcuts and consumer risk

The most alarming aspect of this scandal lies not in accounting fraud, but in the potentially catastrophic safety compromises involved.

Since these vehicles were never intended to reach public roads, many are believed to be missing essential safety features. The goal for manufacturers was to maximise output at minimal cost, not roadworthiness. Safety systems like airbags, stability control, and crash sensors may be absent or underdeveloped in these cars.

Now, as these vehicles enter the secondhand market domestically and increasingly, internationally they present serious risks to drivers and passengers alike. These are not merely cheap EVs; they are fundamentally unsafe luxury products masquerading as bargains.

A blow to consumer trust in Chinese EVs

Once celebrated for affordability and innovation, Chinese EV brands now face a credibility crisis. Buyers both inside and outside China are questioning the integrity of brands like BYD and GWM.

Public revelations by figures such as Great Wall Motor Chairman Wei Jianjun have compared the zero-mileage scandal to China’s notorious property bubble and the Evergrande collapse. If China’s EV sector follows a similar trajectory overhyped, overleveraged, and hollow at its core the global fallout could be devastating.

For consumers, the sense of betrayal is particularly acute. EV buyers often associate their purchase with sustainability and progress. Discovering that a car marketed as “secondhand” is not only unused but also potentially dangerous strips away any sense of value.

Global impact: Unsafe cars in developing markets

The domestic shock is one thing but the export of zero-mileage used cars introduces a global hazard. Many of these vehicles are being offloaded to countries in Africa, Southeast Asia, and Latin America, where vehicle regulations are less stringent and consumer protections weaker.

In these markets, the affordability of a low-mileage EV is highly attractive. However, without full transparency about their origin and build quality, consumers are unwittingly exposing themselves to cars that may fail in critical situations.

This export trend shifts the problem from a national scandal to a global crisis. Substandard vehicles built purely to abuse a subsidy system are now a safety threat across continents.

Regulatory crackdown and industry reckoning

In response to mounting outrage, China’s Ministry of Commerce and other state bodies including the State Administration for Market Regulation (SAMR) and the Ministry of Industry and Information Technology (MIIT) have launched formal investigations. Key players like BYD and Dongfeng have been summoned to explain their practices.

Stricter rules on advertising, subsidy access, and vehicle registration are already taking shape. Terms like “smart driving” and “autonomous driving” are now banned in vehicle marketing unless officially certified. Automakers must also obtain approval for ADAS (advanced driver-assistance systems) updates.

These moves mark a new era of regulatory oversight and potentially, market consolidation. Of the 500 EV startups that existed in China just a few years ago, fewer than 50 are expected to survive by 2030.

The road ahead: Opportunities and cautions

There is no denying that this scandal will reshape China’s EV industry. On one hand, it may accelerate the demise of fraudulent or weak manufacturers and reward those prioritising safety, transparency, and quality. Firms like Nio, Xpeng, and BYD if they adapt and reform could emerge stronger.

On the other hand, consumers and investors alike are now wary. The idea that sales figures could be falsified with ease, or that subsidies could be manipulated so brazenly, undermines faith in Chinese tech giants, particularly in Western markets where regulators are watching closely.

Exporting unsafe EVs under the guise of legitimate sales not only ruins the reputation of Chinese manufacturers but also risks sparking international trade sanctions, product recalls, or lawsuits.

A call for transparency, globally

As countries worldwide embrace the EV transition, trust in manufacturers and supply chains is critical. Governments must demand rigorous import checks and certification for electric vehicles, especially those sourced from high-risk markets.

For third-world countries receiving shipments of “zero-mileage used cars”, the need for independent safety inspections and VIN verification cannot be overstated. Without these, entire fleets of dangerous vehicles could flood streets already challenged by road safety issues.

Conclusion

The “zero-mileage used car” scandal is more than a quirky sales tactic it is a case study in how unchecked ambition and weak regulation can endanger public safety. It reflects the perils of misaligned incentives and the consequences of placing growth over governance.

While Chinese regulators are beginning to act, the implications for the global car market are just unfolding. For consumers, the message is clear: a low price tag should never come at the expense of safety, integrity, or truth.

For Chinese automakers, the only way forward is accountability. And for importing nations, vigilance is no longer optional it is a matter of life and death.

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