Aurelia Butler

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Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.As global electric vehicle sales growth slows, carmakers and regulators are asking an existential question: is the current slowdown a blip? One scenario sees mass market buyers, who currently balk at higher prices of EVs, eventually come around and flock to the technology. EVs are silent, accelerate like sports cars and can save money in the long run. Once they are cheaper than petrol cars, and there are enough chargers, most consumers will never turn back. The other scenario is more worrying. If prices do not fall, or legitimate concerns over charging infrastructure are not met, motorists may resist indefinitely. The implications of the second are potentially concerning. Meeting long-term decarbonisation targets without removing all petrol and diesel cars from the roads is impossible. But if politicians cannot persuade consumers to buy EVs, will they tear up their net zero pledges, or turn to other measures to drive EV sales? You cannot, in the words of Ineos boss Jim Ratcliffe, force EVs “down consumers’ throats”. Norway has become the world’s hotspot for EV adoption by penalising petrol cars through higher taxes. But France’s gilets jaunes protests over higher fuel taxes show this approach will not work everywhere.The shift to EVs will take time. Prices will fall as new models come on sale, while the job of installing charging stations grinds on. “The next two years are going to be very wobbly,” admits one former EV adviser to the UK government, who predicts demand will not pick up until later in the decade. Carmakers must be prepared for either scenario. Asking senior industry executives the question over the past weeks has elicited almost an even split. “EVs are more expensive and just not as good,” says the head of one carmaker that has nevertheless pledged to phase out engine sales in the coming two decades. Carmakers, like all companies, only have a certain number of chips to place on the board. Deciding where to put the money has direct consequences — a new hatchback means no money for an alternative model, for example. The rise of the electric era throws this issue into even sharper relief. Volvo Cars last week made its last-ever diesel model, after choosing to invest in battery models instead.How fast to ramp up EV production is a key — possibly the key — decision being taken in automotive boardrooms currently. From Ford and General Motors all the way up to Bentley, carmakers globally have pulled back EV plans to focus on hybrid models, with one eye on milking the cash cow of the internal combustion engine for just a little longer. But they may not have gone far enough. The global auto industry manufactured 10.5mn electric vehicles last year — and expects to produce 13.5mn this year, according to data pooled from suppliers and forecasters by one auto investor. In 2025, on current projections, output will rise even further to 18mn — a 70 per cent increase in global EV output in just two years, the forecasts show. Yet sales, the same data set predicts, will lag even further behind. EV interest last year resulted in sales of 9.5mn vehicles, but the figure is only expected to be 9.8mn this year. Some investors are now privately warning about an “enormous misallocation of capital” across the industry. “It is difficult to see anything that could cause a marked acceleration in demand in 2025,” says one investor who has studied the data. “Arguably the cars need to be cheaper than their engine equivalents to drive adoption, but with many carmakers already losing billions on EVs, their appetite for further price cuts to promote the switch is going to be very limited.” Even BYD — the most feared of the new EV players from China — has seen price cuts denting its own profitability in the past week. If governments slow targets — a possibility that several carmakers believe is more likely than not — it helps the industry generate higher profits in the short term, while also giving them more breathing room to compete with the coming wave of Chinese EVs. But slow too fast, and you lose the competitive edge. US auto manufacturers are privately worried that a second Donald Trump win will lead to a gutting of EV rules. While this helps boost short-term profits, it shields the industry from the necessity of coming up with something to beat China. As one senior executive at a global auto company told me, if the Chinese sell an EV that is just as good as a western car, but cheaper, that is one thing. But if they sell a better car that also undercuts the west, it’s impossible to catch up. [email protected] More

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(Reuters) – A look at the day ahead in Asian markets.Strong U.S. manufacturing data on Monday ensured the second quarter of the year started with a bang in perhaps the two most important financial assets in the world – the dollar and U.S. Treasuries – which should set the tone for Asia on Tuesday. Bond yields jumped and the dollar spiked to its highest level since November as the ‘higher for longer’ Fed and U.S. economic ‘soft landing’ narratives tightened their grip on fixed income and currency markets.Curiously though, Wall Street held up reasonably well – the Dow fell 0.6% but the S&P 500 only shed 0.2% and the Nasdaq closed in the green. Just. Could this resilience offset higher yields and a stronger dollar, and support risk appetite in Asia?If not, a disappointing raft of Asian factory activity figures on Monday will be cited, along with the dollar’s ascent. The greenback has built up a head of steam, breaking above 105.00 on an index basis for the first time this year and pushing the yen toward 152.00 per dollar back into potential Japanese intervention territory.It looks like the dollar has momentum too, having weakened in only two of the last 13 sessions. U.S. futures market data show that hedge funds have amassed their biggest net long dollar position since September 2022, most of which is against the yen.Monday’s batch of Japanese economic indicators gave off mixed signals, and so offered the yen no clear path. But the U.S. ISM activity data and another uptick in the Atlanta Fed’s GDPNow model estimate for Q2 growth certainly did. Chinese markets started the week on the front foot, however, after a private survey showed Chinese manufacturing activity expanded at the fastest pace in 13 months in March, reinforcing surprisingly strong official survey data over the weekend.Mainland Chinese blue chips rose 1.6% for their best day in a month, easily outperforming the MSCI Asia ex-Japan index which ended slightly lower, and Japan’s Nikkei which lost 1.4%.Asia’s economic and corporate calendar on Tuesday is fairly light. The latest Australian and Indian manufacturing purchasing managers index reports and South Korean consumer inflation are the pick of the bunch.Economists polled by Reuters reckon monthly inflation in Asia’s fourth-largest economy slowed in March to 0.3% from 0.5%, and the annual rate held steady at 3.10%.With inflation running well above the Bank of Korea’s 2% target, interest rates are likely to be kept at their 15-year high of 3.5% well into the second half of the year. Like many central banks in Asia, the BOK will probably for the Fed to ease U.S. monetary policy before moving.Here are key developments that could provide more direction to markets on Tuesday:- Australia manufacturing PMI (March)- India manufacturing PMI (March)- South Korea consumer inflation (March) (By Jamie McGeever; Editing by Josie Kao) More

NEW YORK (Reuters) -Billionaire investor Daniel Loeb’s hedge fund Third Point ended the first quarter with its main fund Offshore up 8%, while the Ultra fund rose 8.7%, extending last year’s gains with successful activist bets, a source familiar with the matter said.Credit and venture capital strategies also boosted results, the source added.Third Point’s investment strategies include activism to push companies for changes.Early 2024 numbers show ongoing improvement in the fund’s performance after a 22% loss in 2022 and 3.6% gain last year.The top engines for gains this year included bets on Advance Auto Parts (NYSE:AAP) and Bath & Body Works (NYSE:BBWI), companies where Loeb and his team pressed for changes that resulted in new board members.Power generation company Vistra helped Third Point’s performance as it closed the acquisition of a nuclear power generator.Big tech firms Amazon.com (NASDAQ:AMZN) and Meta Platforms (NASDAQ:META) were also contributors. For years, Third Point has been among the industry’s most closely watched hedge funds for industry trends.Recently, Loeb’s firm has made additional inroads into credit, raising a private credit fund with plans to launch a corporate credit fund this summer, the source said. Third Point ended March with $11.5 billion in assets under management, about $700 million less than a year earlier.As the first quarter ended, hedge funds have started to disclose returns to investors.Bridgewater Associates, founded by billionaire Ray Dalio, had its flagship Pure Alpha 18% fund up 15.9% in the quarter, said a source familiar with the matter. Bloomberg reported earlier on the fund’s performance. More

The inspection in Wakayama prefecture follows one on Saturday in Osaka, expanding the investigation into the drugmaker’s use of “Beni-Koji” red yeast materials.Osaka-based Kobayashi said it found what appeared to be potentially toxic puberulic acid that could have been produced by blue mould penicillium in Beni-Koji materials produced between last April and October at the Osaka factory.As of Friday, 114 people had been hospitalised and five had died after taking the supplements, which were marketed as helping lower cholesterol levels, the company said.The cause of the deaths has not been confirmed, the official at Japan’s Health and Welfare Ministry told Reuters. But “it is suspected that Beni-Koji may be the cause, so we have inspected two factories in two days.”Kobayashi said on Friday it was investigating a suspected link between the products and their effects on the kidney since it received reports of kidney disease linked to the products.”We will fully cooperate with the investigation so that we can resolve the problems as early as possible,” the head of Kobayashi’s investor relations, Yuko Tomiyama, told reporters on Sunday in footage shown by public broadcaster NHK.The health official said the ministry “would join hands with other ministries concerned to do our utmost to resolve the ongoing case while asking Kobayashi Pharma to cooperate as needed in looking into the case”.The factory in Osaka’s Yodogawa Ward was closed in December due to ageing facilities and production shifted to the factory in the city of Kinokawa that was searched on Sunday, Japanese media reported.The government has criticised the company for taking two months to announce the health impacts of its products. Kobayashi began recalling products on March 22 after receiving reports of kidney ailments. Its products are also consumed in other countries.Japanese media said a case of acute renal failure had been reported in Taiwan. Taiwan’s food and drug administration is investigating three “unexpected health reactions” that may be related to imported materials from Kobayashi, Taiwan’s official Central News Agency reported.A Chinese consumers association urged consumers to stop using potentially affected products, saying it was concerned about the risk of Kobayashi products, state media reported on Friday.Japan’s health ministry is aware of the Taiwanese cases, the official said, declining to comment further on any international cases.South Korea’s ministry of food and drug safety has posted the list of 182 Japanese recalled products made by Kobayashi and other companies that contain red yeast rice, asking consumers not to purchase those items online. The South Korean ministry said on Friday that authorities would dispose or return shipments related to the Kobayashi case at customs. It did not respond to a request for additional comment outside normal business hours.Kobayashi sells Beni-Koji wholesale to 52 companies, which have conducted voluntary inspections and found no materials requiring medical consultation as of Friday, NHK said. Those companies sell the materials on to 173 others, it said.TV Asahi reported that some 1,800 foodmakers could be affected.Beni-Koji contains Monascus purpureus, a red mould used as a food colouring. More

The company said the data set appears to be from 2019 or earlier. AT&T said it does not have evidence of unauthorized access to its systems resulting from the incident.The company said it is not yet known whether the data originated from AT&T or from one of its vendors.AT&T said the incident has not had a material impact on its operations, and said the source of the data is still being assessed.AT&T is in contact with all those impacted and has reset passcodes for 7.6 million current customers. It also said it will offer credit monitoring wherever applicable. The wireless carrier’s 5G network covers around 290 million people across the United States.In February, AT&T had an outage that disrupted calls and text messages for thousands of U.S. users and prompted federal investigations. More