UPS, FedEx transition to electric vans slowed by battery shortages, low supply 25 Apr 2024, 3:47 pm

UPS, FedEx transition to electric vans slowed by battery shortages, low supply

By Lisa Baertlein, Abhirup Roy and Nick Carey

LOS ANGELES/SAN FRANCISCO (Reuters) -UPS and FedEx are facing uncertainty in U.S. supplies of big, boxy electric step vans they need to replace their gas guzzlers and make a dent in the country’s climate-warming tailpipe emissions.

The path to electrification by the package delivery giants is critical to U.S. President Joe Biden’s transportation climate goals. Achieving that aim, however, is hampered by battery shortages that are limiting EV supplies and keeping prices high, and by startup electric van makers that are running out of money and shutting down.

“The question is how many of those (companies) will be here in five years, 10 years?” Luke Wake, UPS’s vice president of fleet maintenance and engineering, told Reuters.

In a double whammy, UPS and FedEx are also losing access to California vouchers that help defray EV prices that can be about two times higher than traditional delivery trucks.

UPS and FedEx obtained some relief from EV supply constraints when trend-setting California, the epicenter of electrification, put on hold a rule that would have required them to purchase electric delivery vehicles exclusively starting this year. An industry group whose members include UPS and FedEx has filed a lawsuit claiming that California first needed the approval of U.S. regulators.

The delivery companies and their electric van suppliers face a Catch-22 situation, said Sam Fiorani, a vice president at AutoForecast Solutions.

“You need the demand to have the supply and you need the supply to have the demand. Getting both of them to work at the same time is the problem,” he said.

UPS has tested and purchased EVs for decades and is a bellwether for demand. It has more than 150,000 delivery vehicles around the globe and is among the top buyers of step vans, replacing about 7,000 of its ubiquitous brown trucks each year in the U.S. alone.

UPS and FedEx, which each have rolled out about 1,000 electric step trucks, are keeping their options open.

UPS is sticking with its plan, set in 2016, to rely on EVs and other alternative fuel vehicles to reduce emissions. Those other vehicles include 13,000 step vans that run on renewable natural gas (RNG).

FedEx told Reuters it is looking for opportunities to incorporate other lower-emission delivery trucks into its fleet.

‘SUBJECT TO AVAILABILITY’

UPS and FedEx favor step vans – larger, often custom-built trucks with roomy cargo areas.

U.S. deployments of EV step vans by UPS, FedEx and others such as bread and linen carriers peaked at 275 in 2021 and fell to 238 in 2022, according to data from the nonprofit CALSTART. Those deployments were between 220 and 250 for 2023, the group estimates.

Meanwhile, delivery rival Amazon.com already has 13,500 smaller electric cargo vans from Rivian across the U.S. and Europe – still a tiny fraction of the broader cargo van market.

UPS and FedEx say electric step vans are hard to find.

“There is limited availability for larger capacity vans,” FedEx said in a statement.

In 2021, FedEx announced its goal to make 100% of pickup and delivery vehicle purchases in its company-owned Express unit electric by 2030. It sometimes adds the words “subject to availability” in statements about that goal.

UPS made a big bet on the EV transition in 2020, investing in UK-based Arrival and placing an order for 10,000 electric vans. But Arrival ran out of money before selling a single vehicle to UPS.

Arrival is not alone. Upstart EV maker Lightning eMotors is in receivership, while Workhorse and Xos have issued going-concern warnings.

Atlanta-based UPS expects to use 40% alternative fuel in its Ground operations by 2025, up from 29% currently. RNG trucks today can be more climate-friendly than EVs powered by electricity from coal and other fossil fuels, Wake said.

Environment advocates do not embrace UPS’s RNG analysis, citing the tiny percentage of RNG in the natural gas supply and the risk of leaks that release methane, a heat-trapping greenhouse gas.

STICKER SHOCK

Wake said EV prices can be “cost-prohibitive,” but declined to disclose how much UPS pays.

In Southern California, UPS recently dispatched new zero-emissions step vans made by long-time supplier Freightliner Custom Chassis Corp (FCCC) – owned by Daimler Truck – and SEA Electric, which is being purchased by Canada’s Exro Technologies.

The cost of an FCCC MT50e electric step van is just over $260,000, according to U.S. General Services Administration documents. That is about double the cost of a traditional model, industry advisers said. Freightliner declined to comment on pricing and said “we stand ready to produce as many MT50e products as the market and our customers demand.”

California for years offered purchase vouchers of $60,000 or $85,000 to all commercial buyers of electric step vans – but changed terms for large companies like UPS and FedEx in 2023.

A Reuters review found those companies now must buy 30 trucks without incentives before they are eligible for half of the value of vouchers on additional purchases. Those large-company incentives will end on Jan. 1, 2025.

As states like Oregon and Washington prepare to offer vouchers, the California incentive change could be weighing on adoption as the biggest fleets historically represent a larger percentage of new truck purchases, said CALSTART Vice President Tor Larson. If the U.S. Environmental Protection Agency clears the way for California to restrict large delivery company fleet purchases to electric and other zero-emissions vehicles, this could give the electric step van market a European-style regulatory nudge. This is because the rule could then be adopted by other U.S. states.

“The U.S. tries to use carrots. Europe does a good job of using sticks,” said Scott Phillippi, a former UPS executive.

(Reporting by Lisa Baertlein in Los Angeles, Abhirup Roy in San Francisco and Nick Carey in LondonEditing by Ben Klayman and Matthew Lewis)

Two million Britons suffer long COVID symptoms, survey shows 25 Apr 2024, 2:33 pm

Two million Britons suffer long COVID symptoms, survey shows

By David Milliken

LONDON (Reuters) – Two million people across England and Scotland are still suffering from long COVID symptoms, of whom 381,000 have had their day-to-day activities limited a lot, according to an official study published on Thursday.

Britain’s Office for National Statistics said 3.3% of people surveyed between Feb. 6 and March 7 reported having COVID symptoms that had lasted more than four weeks since an initial infection and were not explained by another medical condition.

This was up slightly from the 2.9% of people who reported long COVID in a similar ONS survey in March 2023 which covered the whole United Kingdom, although the ONS said the two surveys’ methods were not exactly comparable.

Unlike in other large, rich nations, in Britain labour force participation has fallen since the start of the COVID-19 pandemic in 2020, troubling the government and employers.

A big factor has been an increase in the number of working-age people who are long-term sick, which has risen by around 700,000 since the pandemic.

Thursday’s data showed that 9.1% of people who were not working or looking for work reported long COVID symptoms, nearly triple the rate among the population as a whole.

People aged 45-54 years were most likely to report long COVID symptoms, at 5% of the age group, and women were 20% more likely to report symptoms than men.

Of the people reporting long COVID symptoms in Thursday’s survey, 51% said they started more than two years ago, and 71% said they had lasted at least a year.

Britain recorded more than 230,000 COVID-19 deaths, giving it a similar death rate to the United States and Italy but a higher one than elsewhere in western Europe, based on World Health Organization data.

Thursday’s ONS data was produced with the UK Health Security Agency, based on a sample of 139,000 participants.

(Reporting by David Milliken; Editing by Alex Richardson)

Dollar firmer on higher U.S. inflation; yen sinks vs euro, US currency 25 Apr 2024, 1:06 pm

Dollar firmer on higher U.S. inflation; yen sinks vs euro, US currency

By Gertrude Chavez-Dreyfuss and Stefano Rebaudo

NEW YORK/MILAN (Reuters) – The U.S. dollar gained on Thursday after a hotter-than-expected inflation reading for the first quarter, affirming expectations that the start of the Federal Reserve’s easing cycle could be pushed later in the year.

The yen, meanwhile, hit a fresh 34-year low versus the dollar and a 16-year low against the euro on Thursday as investors expect a Bank of Japan policy meeting that ends on Friday to not be hawkish enough to support the Japanese currency.

The focus, however, has been on the U.S. gross domestic product data and the report’s inflation component. Data showed that GDP increased at a 1.6% annualized rate in the last quarter, based on advance estimates from the Commerce Department’s Bureau of Economic Analysis. Economists polled by Reuters had forecast GDP rising at a 2.4% rate.

The report also showed that underlying inflation as measured by the core personal consumption expenditures (PCE) price index rose 3.7% in the first quarter, eclipsing forecasts for a 3.4% rise.

“The Fed will probably be more concerned with the PCE numbers, which have provided yet another hot set of inflation readings and suggest the battle to return CPI to target is still far from being won,” said Stuart Cole, chief macro economist, at Equiti Capital in London.

“The inflation figures…potentially even point to the need for a further tightening. We know that returning CPI (consumer price inflation) to target is the Fed’s main objective and therefore, on balance, today’s figure probably push an interest rate cut further down the road.”

The U.S. dollar fell as low as 155.31 yen against the Japanese unit after the GDP data, but recovered and was last up 0.1% at 155.53 yen.

The greenback rose to a 34-year high of 155.74 yen, while the euro surged to a 16-year high of 167.02 yen and was last flat on the day at 166.23.

The dollar index, a measure of the U.S. currency’s value against six major peers, was up 0.2% at 105.96.

Following the GDP data, the U.S. rate futures market has priced in a 56.7% chance of a rate cut in September, down from 70% late on Wednesday, according to the CME’s FedWatch tool.

Rate futures traders are now factoring in a 66% chance that the Fed’s first rate cut since 2020 could be at the November meeting.

(Reporting by Gertrude Chavez-Dreyfuss in New York and Stefano Rebaudo in Milan; Additional reporting by Medha Singh in Bengalaru; Editing by Chizu Nomiyama, William Maclean)

Meta sparks tech selloff as AI splurge spooks Wall Street 25 Apr 2024, 12:06 pm

Meta sparks tech selloff as AI splurge spooks Wall Street

By Aditya Soni and Kanchana Chakravarty

(Reuters) -Shares of Meta Platforms sank 13% on Thursday, sparking a selloff in big technology stocks after the social media firm signaled its costly bet on AI could take years to pay off.

The drop was set to erase nearly $170 billion from the company’s market value and triggered a fall of 3% to 4.2% in shares of AI-focused Microsoft and Alphabet and advertising-reliant Snap.

Meta CEO Mark Zuckerberg, who floored Wall Street last year with his cost-cutting drive, said on a post-earnings call that costs would grow “meaningfully” over the coming years before the company makes “much revenue” from some of its AI products.

That stoked investor fears that Zuckerberg was plunging Meta into another costly endeavor at a time when its augmented and virtual reality business was losing billions of dollars each quarter.

“Investors were caught off guard by higher capital expenditure, exacerbated by slightly softer second-quarter revenue guide. As such, shares are entering the ‘penalty box,'” Baird Equity Research analysts said.

Meta forecast April-June revenue below estimates and raised the bottom end of its 2024 total expense forecast by $2 billion on Wednesday. It also raised the top end of its capital expenditure view as it invests in data centers essential to its efforts to catch up with AI frontrunners OpenAI and Microsoft.

The dour expectations follow a series of smash-hit earnings that helped Meta nearly triple its stock in 2023 and powered the biggest one-day market value gain by any company in Wall Street history, of $196 billion, in February after its maiden dividend.

Still, several analysts were positive on the investments, pointing to AI-driven engagement on content such as Instagram Reels and the warm reception for its virtual assistant Meta AI and early versions of its latest large language model, Llama 3.

“We think this time it is different,” Evercore ISI analysts said. “This investment cycle comes from a position of strength, as management continues to see a healthy ad demand environment into Q2 and improving user engagement.”

Overall, 19 analysts lowered their price targets on the stock, while 13 raised their view, according to LSEG data. The median price target now stands at $525, which is about 6% higher than its previous close.

The stock has a 12-month forward price-to-earnings ratio of about 23.12, compared with Microsoft’s 31.17 and Alphabet’s 22.07. It has gained nearly 40% so far this year, comfortably above the benchmark S&P 500 index’s 6% gain.

“Being on the offensive with investment spending is generally great, but in internet it is very hard to underwrite which of those investments will pay back and when,” Bernstein analyst Mark Shmulik said.

“All of this culminates with investors wondering just how long this investment cycle will last, whether the opportunity and payback is real, all against a backdrop of decelerating growth.”

(Reporting by Siddarth S and Kanchana Chakravarty in Bengaluru and Amanda Cooper in London; additional reporting by Johann M Cherian; Editing by Alun John, Janane Venkatraman and Anil D’Silva)

Repsol working on closing first “renewable asset rotation” in US – CEO 25 Apr 2024, 8:41 am

Repsol working on closing first “renewable asset rotation” in US – CEO

MADRID (Reuters) – Repsol Chief Executive Josu Jon Imaz said on Thursday that the company is working to close the first agreement with a renewable partner in the U.S. as part of its asset rotation strategy.

“We are working on closing our first renewable asset rotation in this country,” he said.

(Reporting by Pietro Lombardi, editing by Inti Landauro)

Delivery Hero ups revenue outlook on rising orders, ad revenue 25 Apr 2024, 8:21 am

Delivery Hero ups revenue outlook on rising orders, ad revenue

By Linda Pasquini

(Reuters) -German online food takeaway company Delivery Hero raised its revenue guidance for the year on Thursday on the back of rising orders and earnings from advertising in the first quarter, sending its shares up as much as 11% on Thursday.

The company now expects revenue to rise in a range of 18%-21%, versus 15%-17% earlier, after it performed better-than-expected in an overcrowded market where some rivals are struggling to retain customers following the pandemic boom.

Revenues from advertising by consumer goods companies and restaurants on its platforms, as well as service fees and subscriptions, were better than initially expected, Chief Financial Officer Emmanuel Thomassin said in an interview.

Quarterly total segment revenue increased 21% to 3.02 billion euros ($3.23 billion) in constant currency and 17% in reported currency to 2.95 billion compared to 2.81 billion estimated by analysts in a company-provided poll.

Delivery Hero’s stock was up 9.5% to 31.68 euros at 0952 GMT, having climbed 16% so far this year up to Wednesday’s close.

Growth was led by the Middle East and North Africa (MENA), its second-biggest market after Asia, where revenue grew 29% in constant currency in the first three months of the year, the company said.

In the region, the company not only operates its core food delivery service and quick commerce, delivering groceries, household goods, and items such as flowers and pharmaceuticals in 20 to 30 minutes, but has also launched fintech products.

“So the engagement of the customers and the frequency of ordering (…) is growing faster than probably all the competitors and faster than all the segments,” Thomassin said.

After talks for the sale of its foodpanda business in selected markets in Southeast Asia failed in February, Delivery Hero will still look at any potential deal, Thomassin said, although appetite to buy is probably lower than before due to the company’s extended portfolio. “Every single transaction is a distraction, quite frankly,” he said, as the company is focusing on being more profitable.

Delivery Hero operates in over 70 countries across Asia, Europe, Latin America, and MENA.

In South Korea, its core market, where according to Thomassin Delivery Hero has lost about 7% of its market share to rival Coupang, the company is launching an exclusive partnership with Starbucks and has other initiatives lined up to lure back customers.

Quarterly growth in Asia was flat in constant currency, while declining 5% in reported currency.

($1 = 0.9337 euros)

(Reporting by Linda Pasquini;Editing by Josephine Mason and Elaine Hardcastle)

Factbox-Anglo American, BHP mining operations around the world 25 Apr 2024, 8:09 am

Factbox-Anglo American, BHP mining operations around the world

(Reuters) – British multinational miner Anglo American on Thursday said it had received an all-share takeover proposal from the world’s largest listed miner, BHP Group.

The deal, if agreed, would give BHP access to more copper, one of the most sought after metals for the clean energy transition, and potash, which are its key strategic commodities, as well as more coking coal in Australia.

Here are details on the assets and projects held by each company:

ANGLO AMERICAN

Anglo, headquartered in London, is a major producer of copper, nickel, iron ore, coking coal, platinum and diamonds.

The BHP deal would be conditional on being preceded by separate distribution of its entire stakes in Anglo American Platinum and Kumba Iron Ore to its shareholders, which would significantly lower its exposure to South Africa.

Anglo’s copper mines include Quellaveco in Peru and Los Bronces, El Soldado and Collahuasi in Chile.

The company’s assets also include iron ore and nickel mines in Brazil, coking coal mines in Australia, manganese mines in South Africa and a potash project in Britain.

Anglo operates in the diamond business through its 85% stake in industry giant De Beers.

BHP

BHP, headquartered in Melbourne, produces commodities including iron ore, coking coal, copper and nickel, and is moving into production of potash.

Iron ore and copper are its top revenue-generating metals, with its Escondida mine in Chile and Antamina mine in Peru ranking among the top 10 copper mines in the world by capacity in 2023, according to International Copper Study Group.

BHP is now working towards potash production, with first production planned at its Jansen project in Canada in late 2026.

KEY FINANCIAL AND PRODUCTION DATA

The table shows key financial and production data for both companies. Anglo reports on a calendar year, while BHP reports on a financial year ended June 30.

Anglo BHP

American

Market cap as at 36.71 148.76

April 25 ($ in

billion)

FY23 revenue ($ 30.65 53.8

in billion)

FY23 profit 0.3 12.9

attributable ($

in billion)

FY23 production data in metric tons

Copper 826,200 1.71 million

Iron ore 59.9 257 million

million*

Coal 16 million 29 million

Nickel 40,000 80,000

*Includes Kumba, which would be divested before the BHP deal

(Reporting by Echha Jain and Rajasik Mukherjee in Bengaluru; Editing by Jamie Freed)

China’s largest auto show showcases all-electric future, local brands dominate 25 Apr 2024, 6:32 am

China’s largest auto show showcases all-electric future, local brands dominate

By Kevin Krolicki, Zoey Zhang, Sarah Wu and Qiaoyi Li

BEIJING (Reuters) – China’s largest auto show opened in Beijing on Thursday with the biggest names showing off their latest electric vehicles (EVs), underlining how the world’s largest auto market is already in an all-electric state of mind, and isn’t looking back.

Automakers are set to unveil 117 new models versus 93 at last year’s show in Shanghai，while overall 278 new energy vehicles (NEVs) will go on display, seven more than last year, organisers said.

The show, which runs through early next month, comes as NEV sales hit a milestone in early April, accounting for over 50% of cars sold in China, auto association data showed.

Sales have been getting a boost from a year-long price war that has sapped profit margins, as automakers strive to keep up by announcing newer, cheaper models and promotions.

“At the Beijing auto show, there’s no doubt there is no interest in gasoline vehicles anymore. Everyone is looking for the latest technologies in intelligence and electrification,” William Li, founder and CEO of Chinese EV maker Nio, told Reuters.

“If you come here, you should have no doubt about EVs anymore. It is actually not the future but is what’s happening right now.”

Crowds flooded the booths of Chinese manufacturers such as BYD and industry newcomer Xiaomi, with the smartphone maker stealing the show by holding one of the earliest press events. Xiaomi CEO Lei Jun said locked-in orders for its sporty SU7 sedan had hit 75,723 and that buyers included owners of cars from the likes of BMW and Audi.

BYD, the world’s largest EV maker, heavily promoted its Yangwang and Denza premium brands as it tries to shed its image as a low-cost automaker.

It also announced the Ocean-M, a sporty rear-wheel-drive hatchback priced 150,000 to 200,000 yuan ($20,699 to $27,598) that will be the first vehicle built on a new all-electric platform. The mid-sized car targets China’s middle class and sells far below the price of mainstream EVs in North America and Europe.

Foreign automakers, who have been scrambling to reset their China strategies and catch up with the electric shift, touted plans to invest more in local production and research, with Japan’s Nissan Motor and Mazda Motor unveiling cars tailored for Chinese drivers.

U.S. automaker General Motors left traditional engine vehicles out of its show line-up for the first time, while Germany’s Mercedes Benz dismissed rumours it was giving up on electrification as it showed a handful of new EVs.

Tesla skipped the show again. Its last appearance was in 2021 when an unhappy customer clambered atop a Tesla being displayed to protest its handling of her complaints about brakes she said were malfunctioning.

Some Chinese brands outlined overseas plans, brushing off European and U.S. concerns about industry overcapacity and stressed they had simply become better through innovation.

“With the Chinese automotive industry entering a new era of globalisation and the growing strength of Chinese domestic brands, Chinese vehicles moving onto the world stage has also become a new trend,” said Great Wall Motor President Mu Feng.

SMART DRIVING

Domestically designed advanced driving assistance systems similar to Tesla’s Full Self-Driving (FSD) were also marketed by several automakers as key selling points.

A number of firms, such as Seres and Guangzhou Automobile Group (GAC), which markets China’s third-best-selling EV brand, touted systems supplied by Huawei Technologies whereas others like BYD and XPeng promoted features developed in-house.

BYD said it would launch two revamped models in its mass market Dynasty and Ocean series in the second quarter equipped with its self-developed advanced driving assistance system (ADAS), while XPeng said it would continuously upgrade software at a “super fast” pace to keep it ahead of rivals.

GAC said it would launch flagship models equipped with Huawei’s ADAS from January 2025. It is among seven brands of state-owned automakers that struck partnerships with Huawei to leverage the latter’s ADAS technology.

“Huawei is leading in advanced assistance driving capabilities,” said GAC General Manager Feng Xingya. “We have to make sure the GAC products consumers get are most advanced in those technologies.”

($1 = 7.2468 Chinese yuan renminbi)

(Reporting by Kevin Krolicki, Zoey Zhang, Sarah Wu and Qiaoyi Li; Additional Reporting by Sophie Yu, Liam Mo, Yuhan Lin and Daniel Leussink; Writing by Brenda Goh; Editing by Christopher Cushing)

Unilever beats quarterly sales growth forecasts 25 Apr 2024, 5:07 am

Unilever beats quarterly sales growth forecasts

(Reuters) -Unilever’s first-quarter sales grew by a better than expected 4.4%, it said on Thursday, as one of the world’s biggest consumer goods companies won back shoppers who had traded down to cheaper products.

Unilever, which makes products ranging from Dove soaps to Hellmann’s mayonnaise, said it was confident in its ability to deliver sustained volume growth and maintained its full-year outlook.

The company increased its sales volumes by 2.2%, its second quarter of growth after several consecutive quarters of volumes falling. It raised prices by 2.2% during the quarter.

Analysts had expected sales volumes to rise by 1.2% and prices to increase by 1.8%. Its underlying sales growth of 4.4% was above the 3% estimate seen by the analysts in a company-provided consensus.

(Reporting by Agata RybskaEditing by David Goodman and Matt Scuffham)

Chinese EV battery maker CATL unveils LFP battery with 1,000 km range 25 Apr 2024, 4:53 am

Chinese EV battery maker CATL unveils LFP battery with 1,000 km range

BEIJING (Reuters) – Chinese electric vehicle (EV) battery maker CATL on Thursday unveiled a lithium iron phosphate (LFP) battery with a driving range of more than 1,000 kilometres (621 miles) on a single charge.

The Shenxing Plus is the world’s first LFP battery boasting such a range, Chief Technology Officer Gao Huan of CATL’s e-car division said on the first media day of the Beijing auto show.

LFP batteries are environmentally friendlier than the lithium-ion batteries more commonly used in EVs.

Four car models use the current-generation Shenxing battery with its 700 km range, and over 50 more models will be equipped with it by year-end, Gao said.

The world’s largest EV battery maker, formally Contemporary Amperex Technology, saw profit swing to growth in January-March after three months earlier posting its first quarterly profit fall since 2022 amid slowing demand and intensified competition.

Chinese battery makers including CATL grew faster than rivals to account for more than two-thirds of global EV battery capacity last year, showed data from consultancy Counterpoint Research.

In March, CATL’s chairman said the manufacturer is in discussions to establish research and development centres in Hong Kong to underpin technology exports.

(Reporting by Qiaoyi Li and Brenda Goh; Additional writing by Liz Lee; Editing by Christopher Cushing)