Yusheng's Taocheche leads China's growing used-car market but faces losses amid trust-building costs.

Yusheng Holdings Ltd., operator of Taocheche, China's largest used-car platform, is preparing for an IPO as the country's used-car market expands, reaching 20.1 million transactions in 2025. Despite growing revenue and market share, Yusheng faces significant net losses due to high costs in building buyer trust through inventory management, inspections, and offline sales centers. The market is still fragmented with challenges like opaque vehicle histories and inconsistent pricing, but policy reforms and shifting consumer habits are driving growth. The success of Yusheng's IPO depends on whether investors believe its costly trust-building model can eventually become profitable.