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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Good morning. Elon Musk’s Tesla and Chinese rival BYD both reported sharp falls in electric car sales, adding to concerns of the slowing shift towards electric vehicles.
Both companies — the world’s top two sellers of EVs — have cut prices in order to stimulate demand as they face increased competition, especially in China.
The established auto industry has been warning for months that mainstream buyers remain sceptical of electric cars because of their higher prices and need to recharge.
The disappointing quarter was still enough for Tesla to reclaim the crown from BYD as the world’s biggest seller of electric vehicles, after the Chinese company posted a 42 per cent fall in quarterly EV shipments to 300,114.
Analysts said the ongoing price war among Chinese EV manufacturers could lead to a vicious cycle. Here’s more on the ultra-competitive Chinese market — plus a closer look at Tesla and BYD’s slipping sales.
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Opinion: What if the current EV slowdown is not a blip? Expansion of production is far outstripping demand, raising fears of a misallocation of capital, writes Peter Campbell.
And here’s what else I’m keeping tabs on today:
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Chinese business confidence: Caixin is scheduled to release its March services purchasing managers’ index reading. Investors will be closely watching for indications that depressed sentiment is beginning to lift.
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More economic data: Hong Kong reports February retail sales, while the EU publishes April flash consumer price index inflation rate figures and unemployment rate
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Nato foreign ministers’ meeting: Alliance diplomats will discuss a proposed five-year $100bn fund for Ukraine. The proposal is an attempt to shield Kyiv from “winds of political change” that could usher in a second Trump presidency.
Five more top stories
1. Joe Biden and Xi Jinping held a telephone call yesterday, in the first engagement between the US and Chinese leaders since they met in San Francisco in November in an effort to stabilise relations. Their nearly two-hour long “candid” discussion covered issues including Taiwan, TikTok and sanctions.
2. Three US senators have voiced concern about Nippon Steel’s business ties in China, opening a new front in a political effort to stop the Japanese group from completing its proposed $14.9bn acquisition of US Steel. Ohio Democrat Sherrod Brown on Monday asked US President Joe Biden to investigate Nippon’s exposure to the Chinese steel industry, according to a letter obtained by the FT.
3. The Beijing-based Asian Infrastructure Investment Bank is in talks to provide a second loan guarantee deal to the World Bank. The move would deepen the lenders’ partnership and allow the Washington-based institution to increase lending. Here’s why multilateral development banks are increasing co-operation.
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World Bank warns over south Asia: India and its neighbours are not creating enough jobs to sustain their young populations, the multilateral lender has warned, putting the region’s demographic dividend at risk.
4. Israeli Prime Minister Benjamin Netanyahu admitted yesterday that his country’s military had killed 7 humanitarian workers for World Central Kitchen, a major provider of food aid in Gaza. Netanyahu confirmed that Israel was investigating the air strike, as the US and other western nations stepped up calls for explanations. Here are more details.
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More Middle East news: Iran and Hizbollah yesterday vowed to retaliate after a suspected Israeli air strike on Tehran’s consulate in Damascus killed 7 Revolutionary Guard officers, including two ranking commanders.
5. A top US monetary policymaker has said the strength of the US economy means that interest rates are unlikely to fall as far as expected in the longer term, as she all but ruled out a cut as soon as May. The Fed’s Loretta Mester revealed in a speech yesterday that she had raised her estimate of the longer-run federal funds rate from 2.5 per cent to 3 per cent.
The Big Read
Donald Trump is ahead in most polls for November’s election, but in terms of finances, he is lagging far behind President Joe Biden, whose campaign has raised twice as much. That is because the former president’s 2024 campaign is unlike any other: money comes in, but just as quickly, some goes straight out to protect him from jail. He now needs the traditional Republican mega donors, many of whom are more wary of a second Trump term than small-dollar loyalists who embrace the Maga rhetoric.
We’re also reading . . .
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China’s rival to Boeing and Airbus: State-backed aircraft maker Comac sees south-east Asia as its best opportunity for overseas sales of its new C919 passenger jet.
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Democracy vs autocracy: All the evidence shows that despotism cannot consistently deliver the economic goods for developing countries, writes Martin Wolf.
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Record-keeping in the digital age: Digital technology has proven fantastic for the sharing of information but far less useful in preserving it for archival or public use, writes Stephen Bush.
Chart of the day
European airlines have cut back routes to Asia because of competition from state-backed Gulf carriers, which often offer cheaper fares for passengers willing to catch a connecting flight in the Middle East.
Take a break from the news
Thirty years after the death of Nirvana frontman Kurt Cobain, his aesthetic lives on. Annachiara Biondi looks at the impact of grunge style on today’s fashion.
Additional contributions from Tee Zhuo and Gordon Smith
