Geely’s Zeekr brand is under fire for allegations of sales fraud and unfulfilled promises, as the company denies these accusations and prepares for its US initial public offering.
Last year, consumer discontent with Zeekr grew as Chinese subsidies for electric vehicle (EV) buyers came to an end. Zeekr attempted to offset this loss by promising lifetime warranties to those who ordered the 2022 Zeekr 001 before December 31st, 2022. Many customers placed orders, drawn in by the subsidy and lifetime warranty benefits, but were unaware that the 2023 Zeekr 001 had not yet been released.
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On January 1st of this year, the national subsidy for EVs ended and Zeekr released the 2023 Zeekr 001, offering some functions for free to buyers of this version. However, unlike the 2022 variant, the 2023 model did not come with a lifetime warranty. This left customers with the difficult choice between the two options, leading to heated debates and criticism of the company.
The situation escalated when Zeekr announced that it would be in talks with customers about their 2022 orders once the 2023 edition was unveiled. Many customers felt that this announcement violated their agreement with the company, leading to accusations of sales fraud and concealing the launch of new models.
Over 2,000 customers currently ordering Zeekr vehicles have filed a combined complaint, with some alleging that the company has not fulfilled promises made in their car purchase agreements. In response, Zeekr denies any wrongdoing and claims that some clauses of the agreements differ between periods, a common industry practice. However, the company insists that it always strictly follows the signed agreements and does not unilaterally amend them to harm consumer rights.
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To add to the company’s woes, production at Zeekr’s factory was closed for 22 days between January 11th and February 1st of this year. In January, the sales volume of the Zeekr 001 was only 3,116 units, a 72.5% drop from the previous month and an 11.7% decrease from the previous year. Despite this, the Zeekr 001 remains the highest-selling EV model in China priced above 300,000 yuan ($43,680), with a monthly sales volume of 11,300 units.
As Zeekr prepares for its US IPO, it remains to be seen how the company will address these allegations and whether it can regain the trust of its customers.
