China's Auto Association Corrects Report on Zero-Mileage Crackdown Plans

BEIJING - A startling report from Auto Review—the publication arm of the China Association of Auto Manufacturers (CAAM)—that China's Ministry of Industry and Information Technology (MIIT) planned a six-month resale ban on "zero-mileage" used cars has been hastily retracted. The walk-back, issued less than 24 hours after publication, suggests growing concern among Chinese regulators about harming confidence in the domestic automotive sector, particularly its globally expanding electric vehicle industry.

Initially, Auto Review claimed MIIT would bar the resale of vehicles registered but never driven—so-called “zero-mileage” units—commonly used by dealers and automakers to artificially inflate monthly sales figures. But the revised version deletes that claim entirely, stating only that MIIT will “work together with relevant departments” to regulate the issue at its source, without imposing any specific restrictions.

This unusual reversal appears to reflect pressure from higher authorities, possibly including the Chinese Communist Party (CCP), to minimize public disruption and reputational risk. Industry observers note that China’s EV sector is already under global scrutiny, facing new EU tariffs and increasing skepticism around state subsidies and data integrity. A public admission of systemic sales inflation could have had ripple effects on consumer trust and international market access.

By softening the language and reframing the issue as part of a long-term regulatory strategy, the revised message aligns with a common CCP approach to narrative control: avoid alarming signals while signaling incremental oversight. The incident also underscores the central government's sensitivity to perceptions of instability or manipulation in sectors seen as strategically vital to China's economic future.

The controversy centers around the practice of pre-registering unsold vehicles—often showroom units or inventory nearing end-of-quarter deadlines—and then reporting them as sold. These zero-mileage vehicles are technically “used” but may never have been driven. Critics argue that the practice distorts true demand and places undue financial burden on dealerships.

While the corrected article avoids naming specific penalties, it does reaffirm that automakers such as BYD and Chery are reportedly taking internal steps to hold dealers accountable for registering vehicles only after completed transactions. The China Automobile Dealers Association has also proposed mechanisms to track exports and dealer behavior more closely, indicating broader efforts to tighten regulatory compliance.

Implications for the EV Market

China’s revised stance signals a retreat from heavy-handed enforcement toward a more measured, behind-the-scenes approach. By opting for inter-agency coordination and self-discipline among manufacturers and dealers, regulators aim to preserve confidence in a sector already grappling with overcapacity, thin margins, and international headwinds.

For EV manufacturers, both domestic and foreign, the key takeaway is that Chinese authorities remain vigilant—but cautious—about how they implement reforms that touch sensitive economic indicators like reported sales volume. The rollback suggests that preserving short-term stability and international credibility currently outweighs aggressive market correction.

Bottom Line for EVWORLD Readers

The MIIT zero-mileage crackdown may not be off the table entirely—but Beijing is choosing its timing and tone carefully. The rapid correction likely reflects both internal market anxiety and top-level messaging discipline, especially with Chinese EV brands now facing growing scrutiny overseas. Stakeholders should expect quiet, systemic enforcement rather than headline-grabbing crackdowns.

Source: Reuters

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