Imagine heading to a used car lot and finding it filled with shiny electric vehicles that look like they just rolled off the production line. The “new car” smell still fills the cabin, the seats are wrapped in plastic, and the odometer barely registers any mileage. Yet, the paperwork says it’s a used car.
This isn’t a fictional scenario, but part of a growing practice in China’s auto industry: the “zero-mileage used car.”
Chinese car manufacturers are registering brand-new vehicles as used and exporting them abroad at lower prices. This tactic, known as the export of zero-mileage used cars, has become increasingly widespread—actively supported by local governments, even as it draws criticism from top industry officials and regulators.
How does the scheme work?
It starts the moment a car leaves the factory. It’s registered in the name of a local dealer or affiliated company, receiving official license plates in China. This formally reclassifies it as a used vehicle. In some cases, no actual payment is made to the manufacturer, or it is deferred—making the transaction largely symbolic for the sake of recording a sale. The car is then resold domestically or exported abroad as “used.”
This allows manufacturers to log it as a completed sale and book the revenue—without the vehicle ever reaching an actual consumer in China. For local governments, the strategy is a convenient way to boost economic output and meet growth targets, often linked to officials’ promotions and access to funding from Beijing.
Why is China doing this?
The answer lies in the structural challenges facing its auto industry: overproduction, the aftermath of massive government subsidies, and fierce domestic competition. As a result, automakers are resorting to any means—sometimes accounting tricks—to clear excess inventory and inflate performance metrics.
According to Wei Jianjun, CEO of Great Wall Motors, more than 4,000 dealers are believed to be involved in this scheme. He compared the situation to the collapse of property giant Evergrande, suggesting that a similar crisis may be brewing in the EV sector.
Local government support
Despite growing concerns, at least 20 local governments—including major provinces like Guangdong and Sichuan—have openly backed the export of zero-mileage used cars. Support measures include simplified registration processes, fast-tracked tax rebates, free warehouse space near borders, and promotional funding through e-commerce platforms like Alibaba.
In Shenzhen, local authorities pledged in 2024 to expand these exports, targeting 400,000 vehicles annually. Guangzhou has even allocated additional registration quotas specifically for gasoline vehicles intended for export.
Inflated figures and a distorted market
In 2023, China surpassed Japan to become the world’s largest car exporter, shipping 6.41 million vehicles. The China Automobile Dealers Association estimates that about 6% of these were zero-mileage used cars. Within the used car segment, the figure is even more striking—around 90%.
These exports largely include gasoline-powered vehicles, alongside a substantial share of electric cars that benefited from domestic subsidies and yield healthy profit margins when resold in regions like Central Asia.
Global reactions
The practice has triggered mixed reactions worldwide. Russia has banned the import of zero-mileage used Chinese cars from brands that already have local dealerships. Jordan has started redefining what qualifies as a used car, setting a minimum time between registration and export.
Domestically, however, official silence prevails. China’s ministries of commerce and foreign affairs have not issued any comments, further deepening questions about the legality and ethics of the practice.
