Tesla sales in China fell 98% in April amid shutdowns in Shanghi


Hong Kong
CNN Business

Car sales hit a record drop last month in China, the world’s largest auto market, as strict Covid-19 lockdowns took a toll. Huge economic losses. And no automaker has suffered more than Tesla.

The electric vehicle maker sold 1,512 vehicles in mainland China last month, down 98% from March, according to data from the China Passenger Car Association. Tesla’s production in the country also fell 81% to 10,757 vehicles in April, compared to 55,462 in March.

Tesla exported no Shanghai-made cars in April, compared to 60 cars exported in March.

The drop comes as tens of millions of people in at least 31 cities have been under lockdown for weeks, causing massive disruptions to the supply chain and hitting consumer spending in the world’s second-largest economy.

It’s a stark turnaround for Tesla after a strong start to the year in mainland China. Tesla ranked first in electric vehicle sales in the country in March, delivering 65,184 vehicles from its Shanghai plant. That number is up 15% from February, as consumer demand for electric vehicles has remained strong even during the pandemic.

Last year, Tesla’s “Gigafactory” in Shanghai exported 484,130 cars, nearly half of the company’s 936,000 global shipments.

But its production and sales took a big hit in April, when the government Shanghai and many other cities closed To control the spread of the virus.

Gigafactory Tesla closed for weeks last month, and only recently managed to resume production. But it seems that she ran into another hurdle.

Tuesday, Reuters reportedand, citing anonymous sources, that Tesla has halted most production again due to problems with suppliers. The company did not respond to a request for comment.

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Tesla CEO Elon Musk has tried to play down concerns about China’s lockdowns.

Musk said on Tuesday in A virtual car conference organized by the Financial Times.

“So I don’t expect this to be an important issue in the coming weeks,” he said.

Not everyone shares Musk’s optimism. Shanghai has been under lockdown since late March, and it is not clear when the restrictions will be fully lifted.

City authorities as well tight restrictions Over the weekend, after President Xi Jinping “steadfastly” pledged to double down on the zero-Covid policy.

Other automakers also reported a sharp slowdown in sales and production for the past month.

Toyota

(TM)
On Tuesday, it said it halted operations of 14 production lines at eight plants in Japan, from May 16 to May 21, due to parts shortages caused by the shutdown in Shanghai.

She added that the company’s global production will drop by 50,000 units for the month of May because of this.

“Semiconductor shortages, the spread of COVID-19, and other factors make it difficult to look into the future several months later.”

Another Japanese car maker, Nissan

(NSANY)
On Monday, the motor company announced that its sales in China fell 46% in April compared to a year ago.

“We saw an ongoing impact on auto production and sales in April due to ongoing semiconductor shortages, supply chain disruptions, and shutdowns in major regions and cities due to the spread of COVID-19,” said Shuhei Yamazaki, Nissan Senior Vice President and Chairman of the Board. The company’s management committee of China.

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The China Passenger Car Association said passenger car sales in China overall fell 34% in April compared to March, the biggest drop ever.

“With Chinese ADR and local stock market declining, and the service sector remaining sluggish, people’s income has declined during the epidemic,” the association said. ADRs are securities issued by Chinese companies listed in the United States.

“Purchasing power in the car market has been damaged, and consumers’ desire to buy a car has decreased,” she said.

The industry group also acknowledged that there had been a “significant impact” on supply chains from the shutdowns in Shanghai and Changchun, both cities that are major manufacturing bases for key parts in the auto industry.

In Shanghai, five major automakers reported an average drop of 75% in production in April compared to the previous month. In northeastern Changchun, major automakers saw their production decline 54% over the same period.

On Wednesday, separate data from the China Association of Automobile Manufacturers, another major industry association, showed that overall auto sales in the country fell 46% in April from March, to 1.2 million vehicles. That was the lowest April number in a decade.

But the association expects demand to rise in May, as the peak of the Covid outbreak ends and supply chains gradually return to normal.

The CPCA said retail sales of new energy vehicles — which include electric and hybrid vehicles — were down 37% from March, “different from all other Aprils in history.” However, demand is expected to pick up again and remain strong in the near term.

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“In the current environment, self-driving travel has become the first choice. Affected by higher oil prices, they will choose to purchase new energy vehicles, adding that sales of electric vehicles will rebound strongly this month of April,” the association said.

CNN’s Tokyo bureau and Kathleen Pinosa contributed to this report.

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