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EV Demand Charges Up; Pricing for Carbon; China Cools Off
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A production line for Volkswagen’s electric ID.4 in Zwickau, Germany. PHOTO: MATTHIAS RIETSCHEL/REUTERS
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Today's newsletter was written by WSJ Logistics Report's Jennifer Smith.
Europe’s booming market for electric vehicles may fizzle if pandemic-era incentives expire. The continent’s share of global new electric car sales nearly doubled to 43% last year, the WSJ’s William Boston reports, as government subsidies and dozens of new models rolling off production lines energized supply and demand. But analysts warn that momentum could reverse if governments withdraw generous incentives that help offset the higher cost of electric vehicles, whose prices aren’t likely to fall until battery costs come down several years from now. A similar swing occurred in China after Beijing slashed EV incentives in 2019. European governments are mulling whether to extend the aid past this year. Auto
makers are urging support for infrastructure like charging stations and battery plants, steps that they say could help sustain the electric-vehicle market over the long term.
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Pump jacks in the Permian Basin in Midland, Texas. PHOTO: MATTHEW BUSCH/BLOOMBERG NEWS
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Climate change-driven pricing shifts may be coming to energy supply chains. The American Petroleum Institute is preparing to endorse setting a price on carbon emissions, the WSJ’s Ted Mann and TImothy Puko write, a reversal of the lobbying group’s earlier stance that signals oil and gas producers are ready to accept some government efforts to confront climate change. A draft statement reviewed by the Journal says the trade association “supports economy-wide carbon pricing as the primary government climate policy instrument to reduce CO2 emissions while helping keep energy affordable, instead of mandates or prescriptive regulatory action.” The group doesn't back a specific pricing scheme such
as a carbon tax, a move opposed by many API members. But some majors want the industry to go further in accepting the transition to cleaner fuels, including French oil giant Total, which left API over differences on climate change.
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“It helps make the EV very attractive for the consumer. But long term these incentives and tax breaks are not sustainable.”
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— Hakan Samuelsson, chief executive of Volvo Cars.
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PHOTO: AGENCE FRANCE-PRESSE/GETTY IMAGES
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U.S. manufacturing is gaining steam as China’s hot streak looks to be cooling off. Strong demand for goods helped drive a surge of Chinese exports as U.S. factories struggled to fill pandemic-depleted inventories, but slower manufacturing growth in China last month suggests the recent global trade rebound may be weakening, the WSJ’s Nathaniel Taplin and Justin Lahart write in a Heard on the Street column. The headline factory PMI in China slipped to 50.6 in February while the new export orders subindex fell below 50, though the Lunar New Year holiday can make it tricky to adjust data for seasonal distortions. Meanwhile U.S. manufacturing expanded at a solid pace last month, with the Institute for Supply
Management’s manufacturing index ticking up to its highest reading since February 2018. U.S. factory orders picked up even more, signaling additional support for Chinese exports could be on the horizon.
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$31.8 billion
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U.S. semiconductor imports by value in 2020, down 3.6% from the year before, according to Panjiva.
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The Biden administration says it will use “all available tools” to fight alleged unfair trade practices by China. (WSJ)
The Biden administration plans to go forward with a Trump-era rule aimed at combating Chinese technology threats. (WSJ)
Two South Korean battery makers are lobbying the Biden administration over a disputed factory project intended to supply electric-car batteries to Ford and Volkswagen. (WSJ)
United Airlines is buying 25 Boeing 737 MAX jets and accelerating orders for dozens more. (WSJ)
President Biden expressed support for Amazon workers in Alabama voting on whether to unionize. (WSJ)
Texas’s largest electric-power cooperative filed for bankruptcy. (WSJ)
Fashion brands are disclosing more supply-chain details that show how clothes are made. (WSJ)
Shipping logjams and other supply-chain disruptions are prompting some U.S. retailers to send goods by air. (Bloomberg)
Port truckers held a second protest over congestion at the Port of Baltimore. (Baltimore Sun)
The Port of Los Angeles launched a digital tool that provides snapshots of truck turn times and data on freight volumes. (Sourcing Journal)
Yangzijiang Shipbuilding expects to sign some $3.5 billion in orders this year. (Lloyds List)
Israeli politicians suggested Iran was responsible for a series of explosions on a car carrier off Muscat. (Splash 247)
The cargo division of British Airways parent IAG logged a 16.9% gain in revenue in 2020, to $1.8 billion. (Air Cargo World)
Alibaba logistics arm Cainiao and Saudia Cargo launched freighter service aimed at speeding up e-commerce shipments to the Middle East. (The Loadstar)
Japanese second-hand goods app Mercari will sell products in China through Alibaba’s e-commerce platforms. (Nikkei Asia Review)
Supply-chain software company Descartes acquired foreign trade zone and customs compliance specialist QuestaWeb. (Journal of Commerce)
Walmart dropped the $35 minimum purchase requirement for its two-hour delivery service. (Grocery Dive)
Ahold Delhaize USA took over procurement at the first of six sites that the grocery owner is transitioning from third-party management to self-distribution. (Supermarket News)
XPO Logistics is closing a Palmer Township, Pa. distribution center that employs some 1,000 workers. (Allentown Morning Call)
Diaper banks are struggling to provide supplies to in-need families as demand for hygiene products soars.
(Washington Post)
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