SHANGHAI (Reuters) – When Tesla (NASDAQ:)’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.

Others, from luxury goods manufacturers to fast-food restaurant owners, have offered their first look at the recent sales declines and shaken confidence. This is all while Beijing continues to take measures to stimulate demand and help affected industries.

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. She stated that the company responded by simplifying its menu and promoting bulk orders to locked-down communities.

It is now a pressing question: When and how can Chinese consumers purchase everything, from Teslas to tacos?

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.

Electric vehicles sales had been on the rise before Shanghai was shut down early April in order to control a COVID-19 virus outbreak. Tesla’s sales in China had jumped 56% in the first quarter, while sales for EVs from its larger rival in China, BYD, had quintupled. After that came the lockdowns.

Shanghai had its shops, malls, and showrooms closed. Shanghai’s 25,000,000 residents couldn’t shop online due to shipping bottlenecks. Nomura’s analysts found that China had placed 45 cities (representing 40% of its GDP) under partial or full lockdown, with an economy in increasing danger of falling into recession.

China Passenger Car Association estimates that passenger car sales in China fell 39% in April, compared to a year ago.

COVID control measures cut into shipments, car dealers held back from promoting new models, and sales tumbled in China’s richest markets of Shanghai and Guangdong, the association said.

A Jiangsu dealer representing a German premium car brand told Reuters that sales fell by one-third to 50% in April due to trucking bottlenecks and lockdowns making it hard to ship orders.

He expressed concern about the effects on consumer spending power and declined to name his names as he wasn’t allowed to talk to media.

It is possible that it could even be worse than what happened with the COVID first wave in 2020. That was when the economy recovered quickly and strongly. He said that today there are many uncertainties in the economy and that the stock and real estate markets are struggling.

DOWNWARD SPIRAL

“Much will depend on how fast these restrictions can be lifted but the coming weeks may be difficult,” Helen de Tissot, chief financial officer at French spirits maker Pernod Ricard According to Reuters, (EPA:), on Thursday.

Kering (EPA:), which owns luxury brands including Gucci and Saint Laurent, said a “significant chunk” of its stores had been shuttered in April.

“It’s very difficult to predict what will happen after the lockdown,” said Jean-Marc Duplaix, Kering’s chief financial officer.

Apple (NASDAQ) warned about COVID-hit Chinese demand at its most recent results.

The city authorities of Shenzhen to Beijing are trying to increase demand with millions of dollars in shopping vouchers.

On Friday, Guangdong, a manufacturing powerhouse with an economy larger than South Korea’s, rolled out its own incentives to try to restart sales of EVs and plug-in hybrids.

These include subsidies of up to 8,000 yuan ($1,200) for a select range of what China classes as “new energy vehicles”, including from Volkswagen (ETR:) and BYD. The subsidy program excluded Tesla, which is second in China in EV sales,

A request to comment was not received by the U.S. automaker.

Chongqing was another key auto hub in March. The company offered cash up to $300 for customers who traded their cars for newer models. Another $3 million was set aside for marketing and other initiatives to increase sales.

These measures should be taken, but they are important. Credit Suisse (SIX;) Still, analysts believe COVID control has put online and offline consumption in a downwards spiral.

In a April 19 research note, they stated that the “consumer sector is at significant risk” if there’s a prolonged pandemic in China and continued tightening.