US-listed shares of the Geely-backed Zeekr Group dropped by more than 4% on Monday’s pre-market session, following reports on inflated sales published over the weekend.
On Sunday, Reuters reported that the Chinese automaker has been inflating its sales numbers over the past few years, citing information from several dealers and buyers.
According to the report, the company would insure “0-kilometer used vehicles” — before actually selling them.
By doing this, Zeekr was able to record these vehicles as sales earlier than they were genuinely off the market.
This practice helped the company meet its monthly and quarterly sales targets, since official sales figures are often tracked through insurance registration data.
Local media outlet China Securities Journal had already accounted for Zeekr‘s inflated sales on Saturday, becoming the first automaker to be publicly identified for the practice.
The new energy vehicle (NEV) brand responded to the “innacurate” reports, saying that they refer to “display vehicles,” which have “compulsory traffic insurance but have never been issued retail invoices, nor registered or licensed at any vehicle maganement authority.”
“Legally, they remain unregistered brand-new merchandise vehicles,” Zeekr stated. “We firmly oppose behaviors such as “selling 0-kilometer used cars” that disrupt industry order.”
Shares of Geely Auto also fell as much as 4% in Hong Kong on Monday. The stock closed at HK$18.44, down 2.5% after pairing part of the losses.
Last week, Zeekr Group entered into a definitive agreement to merge with Geely Automobile Holdings, making the premium EV brand a wholly owned subsidiary of Geely and delisted from the New York Stock Exchange.
Under the terms of the merger, Zeekr shareholders will have the option to receive either $26.87 in cash per American depositary share or 12.3 newly issued Geely shares for each Zeekr ADS.
The stock went public in mid 2024 and saw its share price plummet about 50% to $13.00 in the first months. On Friday, it closed at $30.07. The stock surged 60% over the past twelve months.
