China’s EV Mirage: The Zero-Mileage Scam and the Looming Bubble Burst in 2025

Imagine scrolling through an online marketplace and spotting a brand-new Tesla Model Y listed for $46,000—but wait, the seller’s offering it at a steal for just $31,000. Would you jump on it, or would your scam radar go off, prompting you to report the ad? In most places, that’d scream fraud. But swap Tesla for BYD, and in China’s electric vehicle (EV) market, this kind of deal is not only real—it’s becoming alarmingly common. As we dive into July 2025, reports are surfacing of a shadowy practice called “zero-mileage secondhand cars,” where EVs are produced, registered for subsidies, parked in vast lots, and then dumped on the used market at massive discounts. It’s a clever ruse that’s inflating sales figures, pocketing government cash, and masking deeper cracks in China’s EV empire.

I’ve been following China’s economic twists for years, and this latest saga feels eerily familiar—like watching the real estate bubble all over again, but with batteries instead of buildings. Back in 2021, Evergrande’s collapse exposed how overbuilding and debt-fueled growth could implode an entire sector. Now, with EV giants like BYD under scrutiny for similar tactics, we’re seeing parallels that could spell trouble not just for China, but for global markets flooded with cheap exports. In this piece, we’ll unpack the zero-mileage scam, explore its roots in subsidies and overproduction, delve into safety and labor horrors, draw historical comparisons to past bubbles, and reflect on what this means geopolitically. Along the way, I’ll share some thoughts—because if China’s EV push is built on lies, what does that say about the “green revolution” we’re all betting on? Rhetorical question: In a race to dominate EVs, is China speeding toward a cliff?

The Zero-Mileage Phenomenon: A Subsidy Heist in Plain Sight

Let’s start with the basics of this bizarre trend. As highlighted in a July 2025 Reuters report, Chinese auto factories—especially those churning out EVs—are producing vehicles at breakneck speed, registering them as if sold to individuals, and claiming hefty government subsidies.reuters.com These subsidies, designed to boost green tech adoption, can reach up to 30,000 yuan ($4,200) per car, depending on the model and region.carscoops.com But instead of hitting showrooms, many cars sit idle in massive “EV graveyards”—sprawling lots filled with thousands of untouched vehicles, as captured in viral drone footage from sites in Hangzhou and Wuhan.

Once subsidies are pocketed, these “new” cars are offloaded to secondhand dealers at rock-bottom prices. Buyers snag what feels like a brand-new EV for 60-70% of the original cost. A BYD Qin Plus, listing at around 100,000 yuan ($14,000), might go for 65,000 yuan ($9,100) as a “zero-mileage used” model.carnewschina.com It’s a win for bargain hunters, but a red flag for the industry. Great Wall Motors’ chairman, Wei Jianjun, called it out in a June 2025 interview, labeling it a “scam” that’s distorting market realities and echoing the property sector’s overbuild woes.ajc.com

Historically, this echoes China’s subsidy-driven booms. The EV push started in the 2010s with the “Ten Cities, Thousand Vehicles” program, pumping billions into incentives to leapfrog Western automakers. By 2022, subsidies topped $200 billion cumulatively, birthing giants like BYD, which overtook Tesla in global sales that year.statista.com But fraud crept in early: A 2016 audit uncovered $1 billion in bogus claims, with companies faking sales or inflating battery specs.carscoops.com Fast-forward to 2025, and the problem’s ballooned amid cutthroat competition. With over 170 EV makers vying for share, production hit 9.6 million units in 2024, but domestic sales lagged at 8.5 million, per CAAM data—leading to ghost fleets.energynewsbeat.co

Geopolitically, this subsidizes exports: “Zero-mileage” cars are shipped abroad as “used,” dodging tariffs and inflating stats. Europe slapped 38% duties on Chinese EVs in July 2025, citing unfair subsidies, while the U.S. hiked to 100% in May.insideevs.com It’s dumping on steroids, undercutting locals but risking backlash. My reflection: It’s clever short-term, but unsustainable—like borrowing from tomorrow to pay today. If exposed widely, trust erodes, and the bubble pops.

Cutting Corners: Safety Risks and the Human Cost Behind the Facade

The scam’s darker side? Quality suffers when cars aren’t built for real roads. If subsidies are the goal, why splurge on premium materials or rigorous testing? Reports from July 2025 highlight EVs with subpar batteries degrading faster or prone to fires—issues amplified in stored vehicles exposed to elements.business-standard.com A viral video from Xi’an showed a BYD spontaneously combusting, with owners protesting safety flaws.aljazeera.com

Labor horrors compound it. BYD’s been accused of “slave-like” conditions: A 2021 court filing revealed workers logging 441 hours monthly for $1,200—14-15 hours daily, no days off.bbc.com Forced resignations for over-50s violate clauses in deals with Apple or European partners.nytimes.com In Brazil, BYD faced lawsuits in May 2025 for trafficking and exploitative labor at factories.bbc.com Xinjiang ties to forced labor taint supply chains, per a May 2025 TBIJ investigation linking BYD to Uyghur coercion.thebureauinvestigates.com

Historically, China’s manufacturing booms—textiles, electronics—relied on cheap labor, but EVs amplify scrutiny amid U.S./EU “de-risking.” Geopolitically, this fuels bans: U.S. Uyghur Forced Labor Prevention Act blocks imports, hitting BYD’s U.S. ambitions.thebureauinvestigates.com Reflections: It’s heartbreaking—workers as cogs in a subsidy machine. If safety scandals mount, like 2024’s BYD fire recalls, consumer backlash could tank the industry.

Fake Numbers and Propaganda: Inflating the Bubble

BYD’s sales look stellar—1.78 million EVs in Q1 2025, up 40%.tridenstechnology.com But zero-mileage tricks inflate them: Factories register unsold cars for subsidies, “selling” to themselves or exporters as used.reuters.com A July 2025 CNBC report exposed Neta and Zeekr insuring unsold stock as “sold.”cnbc.com BYD/Chery claimed $185M in ineligible subsidies for 21,700 vehicles.bloomberg.com

Overproduction: 9.6M produced vs. 8.5M sold in 2024, per CAAM—echoing real estate ghosts.energynewsbeat.co Propaganda silences critics: Badmouthing BYD is taboo, as “national pride.”reuters.com Geopolitically, fake stats mislead investors—Wall Street hyped BYD, but scandals like July’s $121M fraud probe erode trust.carscoops.com

Reflections: It’s Ponzi-esque—sustain until subsidies dry or bubble bursts. Consumers buy cheap, ignoring risks, killing real used markets.

The Evergrande Parallel: Is EVs China’s Next Bust?

Execs like Wei Jianjun warn EVs mirror real estate: Overbuild, subsidies, collapse.ajc.com Evergrande’s 2021 default ($300B debt) tanked property—30% of GDP.germanautopreneur.com EVs now face “nuclear price wars”—BYD slashed 34% in May 2025.autospies.com Oversupply: 170 makers, but only 7 survive, per forecasts.germanautopreneur.com

Historically, China’s booms (property, semis) end in busts—state props fail. Geopolitically, EV dumping sparks tariffs (EU 38%, U.S. 100%).insideevs.com If bursts, supply chains shatter—global EVs rely on Chinese batteries.

My concern: Like Evergrande, EVs rescued post-property slump but now risk dragging economy down.icis.com

Broader Implications: Global Dumping and the Human Toll

China’s 85% dominance in Brazil/Thailand EVs stems from cheap exports.restofworld.org But fraud erodes trust—cities halted subsidies in June 2025.automotiveworld.com Labor scandals: BYD’s Brazil “slavery” suit (May 2025) highlights exploitation.bbc.com

Geopolitically, U.S./EU probe subsidies—BYD’s $185M ineligible claims.news.com.au Reflections: Green transition shouldn’t mean ethical compromises. If bubble bursts, global EV shift slows.

Conclusion: A Facade Cracking—What Happens Next?

China’s EV “boom” is a subsidy-fueled illusion—fake sales, cut corners, labor abuses. Like Evergrande, overproduction spells doom.ajc.com 2025’s scandals signal tipping point—price wars rage, fraud probes mount.timesofindia.indiatimes.com

Geopolitically, dumping wars loom—tariffs rise, but cheap EVs tempt.cnbc.com For consumers, bargains hide risks. My final thought: If built on lies, how long till collapse? Watch closely—next Evergrande might be electric.