After the coronavirus outbreak was brought under control in March, new-vehicle sales swung back – increasing 4.4 percent in April after a 42 percent slump in first quarter. By July, the market had racked up four straight monthly gains. Now, there are signs that the rebound may be about to end.

While overall new-vehicle sales have rebounded three straight months, China’s electric vehicle market has contracted nonstop following a cut in subsidies in June 2019. To jump-start EV demand, the Chinese government this month came up with two proposals: promote battery swaps and encourage automakers to market EVs to rural residents. Neither of the plans is expected to generate meaningful results any time soon.

China's EV hopefuls, auto suppliers and other startups, racing to bolster cash amid a period of profound disruption, are turning to a new pot to mine for precious capital. 

Inspired by Tesla Inc.’s success in the capital markets and enticed by Beijing’s generous subsidies, electric vehicle startups have proliferated in China over the past few years. Many of them flamed out without ever rolling out a product. The coronavirus epidemic, largely kept under control since April in the country, has further weakened the economy and made it far more difficult for remaining EV startups to raise capital.