Tesla and other EV-manufacturers hard-hit by China’s COVID lockdowns

When Tesla’s Shanghai plant and other auto factories were shut over the last two months by emergency measures to control China’s biggest COVID-19 outbreak, the burning question was how quickly they could restart to meet surging demand.

But with the Shanghai lockdown grinding into its fourth week, and similar measures imposed in dozens of smaller cities, the world’s largest boom market for electric cars has gone bust.

Other companies — from luxury goods makers to fast-food restaurants — have also offered a first read on the lost sales and shaken confidence of recent weeks, even as Beijing rolls out measures to help COVID-hit industries and stimulate demand.

Joey Wat, CEO of Yum China, which owns KFC and Taco Bell, said in a letter to investors that April sales had been “significantly impacted” by COVID controls.

In response, the company simplified its menu, streamlined staffing, and promoted bulk orders for locked-down communities, she said.

The pressing question now is: how and when will Chinese consumers start buying everything from Teslas to tacos again?

EV sales booming before lockdown 

In China’s once-hot EV market, the recent turmoil is a stark example of a one-two economic punch, first to supply and then to demand, from Beijing’s hard-line implementation of COVID controls across the world’s second-largest economy.

Shanghai reported 32 new COVID-19 deaths on May 1, down from 38 a day earlier, the local government said on Monday.

The city recorded 6,606 new local asymptomatic coronavirus cases and symptomatic cases stood at 727.

Before Shanghai was locked down in early April to contain a COVID-19 outbreak, sales of electric vehicles had been booming.

Tesla’s sales in China had jumped 56 per cent in the first quarter, while sales for EVs from its larger rival in China, BYD, had quintupled. Then came the lockdowns.

Showrooms, stores and malls in Shanghai were shut and its 25 million residents were unable to shop online for much beyond food and daily necessities due to delivery bottlenecks.

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