May 12, 2022: -In April, automakers production plunged as Covid lockdowns halted almost all non-essential business in the metropolis of Shanghai, according to a report from the China Passenger Car Association.

In a Tuesday report, the association said that five major car companies in Shanghai saw production plunged by 75% in April. Production at major foreign automakers’ joint ventures in the northern city of Changchun came down by 54% during that time, the report said.

Nationwide, China’s passenger car production plunged in April, decreasing by 41.1% every year and by 46.8% compared to the last month, the report said.

The auto sector in China accounts for about one-sixth of jobs and roughly 10% of retail sales, according to official figures for 2018 compiled by the Ministry of Commerce.

According to Citi, Shanghai is home to many auto producers: SAIC Motor, SAIC’s joint companies with Volkswagen and GM, Nio, Tesla, and Ford.

Although the city began to prioritize several hundred companies for resuming work in mid-April, foreign business organizations have said that doesn’t mean the factories can operate at total capacity. Suppliers may also remain closed or unable to transport parts.

Tesla’s Shanghai Gigafactory, which reopened with much fanfare about three weeks ago, remains subject to ongoing Covid uncertainty.

This week, the company had to reduce production in Shanghai due to Covid-related issues, according to JL Warren Capital CEO and Director of Research Junheng Li. A supplier had to close temporarily due to Covid, limiting the availability of parts for Tesla’s Model Y.