China Eyes Six-Month Auto Resale Ban to Halt Mileage Fraud

China is considering a car resale ban, evaluating a six-month embargo on reselling newly registered vehicles. The measure targets the zero-mileage scam, where dealers register and insure unsold cars to inflate sales figures. Reports show brands like Zeekr and Neta pre-insured over 60,000 cars between 2023 and early 2024. Neta’s parent entered bankruptcy amid plunging deliveries, and Zeekr faces questions over discrepancies between reported sales and actual registrations. This proposal follows public criticism from Great Wall Motor’s CEO and an editorial in the People’s Daily. Industry groups are also weighing penalties for dealers and a tracking code for used car exports. If approved, the car resale ban will be Beijing’s first formal crackdown on mileage fraud in its competitive EV market. Market participants should monitor this regulatory shift for potential impacts on EV supply, valuations, and investor confidence.