Volkswagen has spent billions developing cars in China for Chinese consumers.

Now comes the real test: Will Chinese drivers buy them?

The Wall Street Journal’s Stephen Wilmot reports that Volkswagen led the world’s biggest car market for decades. But the automaker’s position in China has rapidly eroded in recent years amid fierce competition from local electric-vehicle makers with more advanced technology.

To catch up, Volkswagen has sought to insulate its floundering Chinese business from the Eurocentric designs and slow decisionmaking of its German headquarters. It has invested $3.5 billion in cutting-edge development facilities in China and struck deals with several tech-savvy local firms.

The company bought a stake in a Chinese EV startup in 2023 in a reversal of an old pattern. For decades, Volkswagen provided the technology to its joint ventures in China, and high-margin licensing fees flowed back to Germany. Now, Chinese companies are supplying know-how and reaping the rewards.

As the first cars produced under the strategy hit the road, the question of whether the vehicles win over Chinese drivers is a litmus test for Volkswagen’s future prospects in the country. It will also be a test case for the survival of other Western brands in China, where consumers increasingly favor local champions.

Used cooking oil could have saved airlines from the global fuel crunch—if supplies weren’t running on empty.

The WSJ’s Clara Hudson and Yusuf Khan write that airlines for years have pointed to so-called sustainable aviation fuel as the future of lower-carbon flying. But production has been slow to pick up speed.

Manufacturing SAF is expensive and largely focuses on converting used cooking oil, animal fats and forestry waste into jet fuel that works with traditional engines. Costs have also been steep. Shortly before the war in Iran, a ton of SAF was about $1,500 more than a ton of traditional jet fuel, according to commodities specialists Argus Media.

SAF producers say aviation companies are more interested in the fuel now that oil supplies have tightened. Companies such as DHL Express and United Airlines plan to buy more of the fuel in what could be a boon to the industry.

Factory activity expanded in the U.S. for the fifth consecutive month in May. (WSJ)

U.S. construction spending accelerated in April. (WSJ)

FedEx Freight closed its first day of trading as a stand-alone company down nearly 7% at $149.53 a share. (WSJ)

USA Rare Earth plans to invest roughly $200 million in France. (WSJ)

China moved to tighten scrutiny over outbound investment. (WSJ)

Two explosions struck a ​cargo vessel in the Persian Gulf, one of which was caused by a drone ​attack, Iraqi officials said. (Reuters)

Shipping executives said security guarantees are needed for commercial shipping operations to return to normal in the Strait of Hormuz. (gCaptain)

Greek shipowner George Prokopiou inked a deal for 12 very large crude carriers at China’s Hudong-Zhonghua Shipbuilding. (TradeWinds)

ZIM hired Chen Lichtenstein as president and CEO as the Israeli container line navigates a proposed takeover by Germany’s Hapag-Lloyd. (Splash247)

Brian Barr, chief mechanical officer at Norfolk Southern, was promoted to chief operating officer. (Trains Magazine)

Demolition began Monday on a 1.2 million-square-foot California warehouse storing Kimberly-Clark products that was destroyed by a fire in April. (ABC7)

Mark R. Long is editor of WSJ Logistics Report. Reach him at mark.long@wsj.com.

Follow the WSJ Logistics Report team on LinkedIn: Mark R. Long, Liz Young and Paul Berger.