China’s Electric Car Market Is Struggling. Investors Are Still Bullish.

China’s Businesses Are Reopening. Consumers Are Still Scarce.

The dearth of spending in China was so severe that several local governments and companies doled out coupons to citizens, which can be used at stores and restaurants. Upcoming data may indicate a rebound, but for now, residents are spending on necessities and little else.

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even as the overall economy bounces back. The epidemic merely twisted the knife after the industry’s 30-year growth run.

But observers watched as China’s shutdown came and went more quickly than expected and broad metrics like fixed-asset investment and industrial production rebounded. Auto sales weren’t early to join the upswing—tumbling 42% in the first quarter.

Things finally brightened in April, when 4.4% year-over-year sales growth broke the 21-month slump, driven by no-longer suppressed demand and by government incentives. Last month’s sales surprised even some bullish analysts, leaping 14.5% year-over-year.

The industry has welcomed revived sales and several international car makers are seeing the bulk of their revenue come from China while U.S. and European markets remain stagnant. But for domestic and overseas sellers alike, the boomlet in the world’s largest vehicle market is presenting a range of strategy questions in a time with scant precedent.