SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson: China has set itself a target that 40% of all the vehicles on its roads will be electric by 2030. And by that year, the aim is that all new-vehicle sales will be electric vehicles (EVs). The country wants to reach peak carbon emissions before 2030 and carbon neutrality before 2060. “After 2030, it is going to be pretty much impossible to get approval for a heavy industry project because of the emissions targets,” said a petrochemicals industry source. This has led to suggestions that the resulting lower availability of feedstocks from local refineries will slow China’s push towards complete petrochemicals self-sufficiency. I disagree for the following reasons. Despite a cap on local refinery capacity, I’ve been told that local supply of naphtha, etc shouldn’t be a problem until up to a least 2030, because refineries will be increasingly turned in petrochemicals feedstock centers. More naphtha and gasoil crackers are expected to be added to refineries ahead of the 2030 cut-off point. Other heavier fractions from refineries are also forecast to be increasingly used as petrochemicals feedstocks. And even if local feedstock supply does become constrained after 2030, we shouldn’t assume that this will restrict domestic production because of the weaker-tonne economics of importing raw materials. China’s closer geopolitical relationships with the Middle East, along with increased availability of natural-gas liquids in the Middle East, suggest that imports of feedstocks will be available at the right costs. My view is that China’s economic challenges will result in annual average petrochemicals consumption growth of 1-3% per year up until 2030. Beyond 2030 I see growth falling to around 1%. Weaker demand growth will of course make it easier to increase petrochemicals self-sufficiency. Because recycling is mainly a “local for local” business due to the restrictions on moving plastic waste across borders growth of recycling in China will, in my view again, increase the country’s self-sufficiency in polymers. Recycling is exactly the type of higher-value industry China needs to nurture as it attempts to escape a middle-income trap made very deep by its demographic challenges. Security of local supplies of raw materials in an ever-more uncertain geopolitical world will add further momentum to the growth of recycling in China. Local virgin polymer and petrochemical plants will run at high operating rates, supported by maximising supply of feedstocks from local refineries and by competitive imports of feedstocks from China’s geopolitical partners. This will further boost supply security. Don’t be therefore distracted by suggestions that the growth of EVs in China and the country’s emissions targets will be good news for petrochemical exporters to China. China will become a vast continent-sized market that will be just about entirely self-sufficient. As I shall explore in a later post, this will apply to specialty as well as commodity grades of petrochemicals. Overseas producers most focus on markets elsewhere. As the chart below shows using high-density polyethylene (HDPE) as an example, the opportunities in other countries and regions are big. China lifted all petrochemicals boats during the 1992-2021 Supercycle, making even the least-competitive companies successful. This is no longer the case. Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.

HOUSTON (ICIS)–The US Department of Agriculture (USDA) outlook for the corn crop is unchanged relative to last month while for soybeans, it is projecting there will be higher beginning and ending stocks, according to the June World Agricultural Supply and Demand Estimate (WASDE) report. For corn, the monthly update said along with no adjustments to its corn forecast from May that the season average price received by producers remains at $4.40 per bushel. The USDA did reveal it will release its acreage report on 28 June, which will provide survey-based indications of planted and harvested area. For soybeans, the WASDE said higher beginning stocks reflect reduced crush for 2023-2024, with it expected to be down by 10 million bushels on lower soybean meal domestic use that is partly offset by higher exports. With increased supplies and no use changes, the USDA said soybean ending stocks are projected at 455 million bushels, up 10 million bushels. The soybean price is forecast at $11.20 per bushel, unchanged from last month. The next WASDE report will be released on 12 July.

HOUSTON (ICIS)–Operations at US ports are stable even as import volumes are at the highest since 2022, and railroad performance has improved over the past month, according to analysts at freight forwarder Flexport. RAILROADS Speaking during a webinar to discuss the state of freight, Nathan Strang, director of ocean freight, US Southwest for Flexport, said its customers are seeing lower dwell times for rail cars at ports over the past month. “I have been talking about how rail performance to and through the West Coast has been suffering a little bit,” Strang said, describing his point of view in past webinars. “I will say that we have seen real improvement.” Strang said West Coast port operations have remained stable, with local pickup dwell at six days for Los Angeles/Long Beach, at five days in Seattle/Tacoma (SeaTac) and at four days in Oakland. “Trucking and transload capacity remain good out of all US West Coast ports,” Strang said. Rail traffic has risen for 19 consecutive weeks, with railcar loadings for the week ended 8 June up 5.7% year on year according to the Association of American Railroads (AAR). For the first 23 weeks of 2024, ended 8 June, North American chemical railcar loadings rose 3.8% to 1,082,614 – with the US up 3.9% to 745,780. In the US, chemical railcar loadings represent about 20% of chemical transportation by tonnage, with trucks, barges and pipelines carrying the rest. PORTS Strang said that apart from the Port of Charleston, South Carolina, volumes are moving really well through the East Coast ports with rail dwell averaging about two days. Charleston is undergoing an infrastructure project on its Wando Welch Terminal to expand the docks. Dock construction at Wando Welch terminal started on 11 March, reducing berth space from three to two berths for one year, with berths given on first come, first serve basis. Strang said some vessels are discharging at the Port of Savannah, Georgia, and then moving material to Wando Welch via trucks, or using other terminals within the Port of Charleston as space becomes available. Overall port omissions from all carriers are starting to reduce the extent of the delays, with six to nine days delay expected in week 24, according to a port update from Hapag-Lloyd. ASIA PORTS CONGESTED Strang said that things are opposite of the conditions seen during the pandemic, when US West Coast ports were dealing with huge backloads and major congestion because of the strong US consumer demand for goods. “Shanghai and Singapore are seeing the most congestion right now, but most ports within Asia are seeing pretty heavy congestion,” Strang said. Carriers are even omitting Singapore on certain services because of the amount of congestion in Singapore, Strang said.

HOUSTON (ICIS)–Chemical companies have started the first half of 2024 announcing potential sales and separations of several businesses, which could lead up to busy cycle for mergers and acquisitions (M&A). Sustainability continues to influence M&A decisions, although it will unlikely lead to any large acquisitions. Private equity firms could play a larger role in M&A despite higher interest rates because financial investors have plenty of money. Electronic materials could be another M&A trend because of government incentives for the semiconductor industry. CHEMS EXPECT MORE M&AMore than half of the chemical executives who participated in a survey expect M&A activity to increase in the next 12-18 months, according to Kearney, a consulting firm that conducts an annual report about deal-making in the industry. By contrast, 18% expect M&A activity to decrease, and 32% expect activity to be roughly stable. The sentiment is more positive than surveys from the past few years, said Andy Walberer, partner and global chemicals lead at global strategy and management consultancy Kearney. He made his comments while discussing Kearney’s recent M&A report. Part of that optimism comes from the divestment plans and strategic reviews recently announced by chemical companies, he said. Also, executives at chemical companies are no longer contending with the COVID-19 pandemic and the subsequent supply-chain disruptions. They have the headspace to think about medium- and long-term strategy, he said. SUSTAINABILITY CONTINUES INFLUENCING DEALSSustainability will unlikely lead to high-dollar deals, but it will still be a noteworthy trend, Walberer said. Chemical companies are scrambling to secure supplies of recycled and renewable feedstock. Chemical executives and Kearney have noted the gap between supply and demand for sustainable feedstock. To secure feedstock, companies have been establishing partnerships or acquiring businesses. Walberer expects that trend to continue. In other cases, chemical companies are making sustainability M&A decisions in response to government incentives and regulations, Walberer said. Kearney has seen some companies divest sections of portfolios because of high carbon emissions, Walberer said. PRIVATE EQUITY HAS PLENTY OF DRY POWDERHigher interest rates have made M&A more challenging for private equity firms because of their traditional reliance on debt-financed acquisitions. That said, private equity firms have built up large stashes of dry powder. They could put that money to work without debt, which has become more expensive because of higher interest rates. At the same time, chemical valuations have fallen. “We see PE very active,” Walberer said. Walberer noted that financial investors made up 26% of chemical deals in 2023, up from 7% in 2022 and above the historic range of 15-20%. In particular, private equity firms may acquire some of the infrastructure assets that chemical companies are eager to divest. Dow had expressed interest in selling more of its infrastructure after agreeing to divest its rail assets at six sites in mid-2020. Recent and upcoming carveouts could provide private equity firms with more M&A opportunities. In December 2023, Solvay carved out its specialty business, called Syensqo, from its mostly commodity business. DuPont expects to complete its breakup into three companies in the next 18-24 months. CHANGING OUTLOOK FOR EUROPEEuropean chemical M&A experienced a slowdown because of the spike in energy and feedstock costs that followed the start of the war in Ukraine, according to the Kearney report. It should continue declining in the next 12-18 months before a possible rebound. “Amid ongoing challenges, big chemical players are under stress, prompting them to review their business models and restructure,” Kearney said in a report regarding Europe. In some cases, the owner of a business may decide to put it on the market after realizing it is no longer a core part of the company, Walberer said. The corporation concludes that it is no longer the best owner of the business and decides to divest it. “There are a lot of good examples of how new owners have been able to improve the performance of the business,” he said. DuPont’s performance coatings business would later flourish as Axalta Coatings Systems. which was initially sold to Carlyle for $4.9 billion before becoming a publicly traded company. Another example is Nouryon, the surfactants business that was spun off from AkzoNobel. In other cases, the business’s performance has suffered because of structural reasons, such as high costs, Walberer said. GOVERNMENT SEMICONDUCTOR INCENTIVES MAY DRIVE M&AElectronic materials could become another M&A trend because of the incentives being lavished by government, Walberer said. The US, China, the EU, Japan, Germany and South Korea are among the countries that created semiconductor incentive programs worth billions of dollars. DuPont’s electronics business is one of the three that will break out of the company. That business itself is the product of acquisitions made by DuPont. CHEM M&A ACTIVITY OVER THE YEARSTypically, the value of chemical M&A is $100 billion to $120 billion per year, a level it reached in 2022 and 2023, Walberer said. The COVID pandemic and its subsequent recovery distorted M&A in 2020 and 2021. Values in 2019 and 2016 spiked because of large deals such as the Dow and DuPont merger and Aramco acquiring a large stake in SABIC. ANNOUNCEMENTS IN 2024The following lists some of the major chemical M&A announcements made so far in 2024. February 26: PPG explores strategic alternatives for its architectural coatings business in the US and Canada. It could reach a decision by the end of the third quarter. March 4: Evonik agrees to sell its superabsorbents business to International Investors Group (ICIG). March 13: Trinseo seeks to sell its stake in Americas Styrenics. It later clarified that the entire joint venture is for sale. May 6: BASF plans to sell its idled ammonia, methanol and melamine units in Ludwigshafen, Germany. May 8: LyondellBasell starts strategic review of the bulk of its operations in Europe. May 8: Shell agrees to sell its refinery and petrochemical assets in Singapore to the CAPGC joint venture. May 22: DuPont plans to break up into three companies, including one focusing on electronics and another on water. Insight article by Al Greenwood Thumbnail image by ICIS.

SAO PAULO (ICIS)–The drought affecting the Altamira petrochemicals hub in Mexico’s state of Tamaulipas is not yet affecting the supply of chemicals, but the water restrictions for industrial players could continue, sources said this week. The modest rainfall in the past few days has not resulted in any great improvement in water supplies, with households still suffering water restrictions. Supplies to industrial players will only resume when supply for households is normalized. Earlier this week, Mexico’s chemicals producer Alpek declared force majeure on supply of purified terephthalic acid (PTA) out of Altamira. The producer has the capacity to produce 1 million tonnes/year in two plants at the petrochemicals hub. Sources in the US PTA and polyethylene terephthalate (PET) markets have said they fear disruptions to supply if the crisis in Altamira continues. In May, the critical situation affecting water supply to residents in the area prompted authorities to halve water supply to industrial players, with many of them declaring force majeures thereafter. This week, a well-connected source in the Mexican petrochemicals industry limited the current crisis, for now, to production issues, with supplies of all materials still flowing. “What we are hearing in the market is not about shortages – for now, it is limited to a production problem,” the source said. “A lot of US product also comes to Mexico, so for now there is no supply problem as such. However, everything will depend on how long it takes for this to be resolved so industry can return to normal production.” Weather patterns developing normally, Mexico’s east coast should be entering the rainy and hurricane season soon, which could start to ease Altamira’s drought. However, with residents in the area still suffering water restrictions in their homes, normalization in water supplies to industrial players should still take some time. The light rain in the past few days, however, may already be starting to show positive effects. Last week, local media in Altamira reported how the Champayan lagoon, west of the city and a natural spot very much loved by the locals, had dried up overnight. On 11 June, residents woke up to a lagoon with water again. ELECTIONS STOLE FOCUS FROM DROUGHTMexico concluded on 2 June an electoral process which kept political parties’ focus away from the drought developing in Tamaulipas, said the source in Mexican petrochemicals. “Altamira is located in an area which doesn’t lack water. The drought became a perfect storm on the back of the authorities’ poor response. In an election year, instead of investing resources to reverse the drought situation months ago, those resources went to the electoral campaigns,” it said. “Having so much water in the area, they could have installed pumps in certain rivers to transfer water to other rivers, which could have solved the situation preventively. They are pumping water now, but now turned out to be too late for industrial players. In addition to the drought, the campaign had the greatest impact in the current crisis.” Last week, the government of Tamaulipas ordered that tanker trucks be sent to the south of the state from other municipalities not affected as harshly by the drought, as well as from other Mexican states. The trucks will not sort out the dire situation at industrial parks, however, because the water is being deployed to households only. The latest report by the public body in Mexico monitoring the drought, published on 5 June and covering up to 31 May, continued showing the state of Tamaulipas in the Gulf Coast as one of the hot spots suffering the current crisis. MEXICO DROUGHT MONITORTamaulipas (east) suffers ‘exceptional drought’ amid a nationwide crisis Color scale: Yellow, abnormally dry; light orange, moderate drought; orange, severe drought; red, extreme drought; brown, exceptional drought Source: Mexico’s National Water Commission, part of the National Meteorological Service. See more here, in Spanish Front page picture: The Port of Altamira, Mexico’s state of Tamaulipas Source: Altamira Municipality Focus article by Jonathan Lopez

SINGAPORE (ICIS)–China has slammed EU’s proposal to impose provisional tariffs on imports of Chinese electric vehicles (EVs), denouncing it as a “blatant act of protectionism”, raising concerns that a trade war between Asia’s biggest economy and a new western front is brewing. EU tariffs on Chinese EVs to rise to 27-48% Retaliatory measures from China likely EU imports of China cars surge sevenfold over three years “The European side has disregarded facts and WTO [World Trade Organization] rules, ignored China’s repeated strong opposition, and ignored the appeals and dissuasion of multiple EU member state governments and industries,” China’s Ministry of Commerce said in a statement issued late on 12 June. The European Commission on 12 June notified Chinese automakers, including EV giant BYD, Geely, and state-owned SAIC Motor Corp, that it will impose additional provisional tariffs of 17% to 38% on imported Chinese EVs from around 4 July. These will be applied to existing 10% tariffs imposed on all Chinese EVs, with the final rate determined by each carmaker’s level of cooperation with EU’s anti-subsidy investigation launched in September last year. NEW FRONT FOR TIT-FOR-TAT TRADE WAR China’s commerce ministry has urged the EU to “immediately correct its wrong practices” and “properly handle trade frictions through dialogue and consultation”. The ministry said it will “resolutely take all necessary measures to firmly defend the legitimate rights and interests of Chinese companies”. “This move by the European side not only harms the legitimate rights and interests of the Chinese electric vehicle industry but will also disrupt and distort the global automotive industry chain and supply chain, including the EU,” it said. The EU’s move follows the US’ tariff hikes announced last month on Chinese imports of EVs, batteries and other materials, starting 1 August. In 2018, then US President Donald Trump initiated a trade war with China by imposing tariffs on Chinese imports to address alleged trade imbalances, intellectual property theft, and unfair trade practices. China retaliated with tariffs on US goods, escalating tensions between the two biggest economies in the world. While reviews by the US and EU on Chinese goods were under way, Beijing launched in May an anti-dumping investigation into imported polyoxymethylene (POM) copolymer, also known as polyformaldehyde copolymer – a key material in electronics and automotive manufacturing. China’s commerce ministry alleged that the plastic is being sold below market value, harming domestic producers. The probe, targeting imports from the US, EU, Taiwan, and Japan, could last up to 18 months and is seen as a direct response to their recent trade barriers against Chinese goods. In the case of Taiwan, China has also suspended tariff concessions on 134 more products from the island, including base oil, chemicals, and chemical products, citing Taiwan’s supposed violations of the Cross-Strait Economic Cooperation Framework Agreement (ECFA) with the mainland. Meanwhile, Japan’s tightened export controls on 23 types of semiconductor manufacturing equipment that took effect on July 2023 was deemed in line with restrictions imposed by the US and the Netherlands, potentially hindering China’s access to advanced chipmaking technology. China may issue further retaliatory measures, potentially impacting global supply chains and escalating trade tensions with major economies in the west. The automotive industry is a major global consumer of petrochemicals that contributes more than one-third of the raw material costs of an average vehicle. The automotive sector drives demand for chemicals such as polypropylene (PP), along with nylon, polystyrene (PS), styrene butadiene rubber (SBR), polyurethane (PU), methyl methacrylate (MMA) and polymethyl methacrylate (PMMA). CHINA 2023 CAR EXPORTS TO EU SURGE China’s exports of automobiles to the EU have surged over the past year, particularly in the battery electric vehicle (BEV) segment, according to Nomura Global Markets Research. Cars produced in China accounted for 20% of all BEV registrations in the EU during the first two months of 2024, it said, citing data from automotive business intelligence firm JATO Dynamics. An analysis of January-April 2024 sales figures from China’s top three EV manufacturers in the EU, however, suggests that their overall presence in the region is still nascent, Nomura noted. In 2023, EU’s imports of Chinese EVs surged to $11.5 billion, more than sevenfold increase from $1.6 billion in 2020, according to think thank Rhodium Group. China accounted for 37% of EU’s total EV imports last year, it said. In the first quarter of 2024, about 40% of China’s EV exports or 145,002 units went to Europe, according to official customs data. Focus article by Nurluqman Suratman Thumbnail image: An electric car at a charging station near the European Commission building in Brussels, Belgium. (Xinhua/Shutterstock)

SINGAPORE (ICIS)–China’s consumer inflation rate is expected to remain weak in the near future on persistently weak domestic demand, raising worries about the risk of deflation as the nation’s economic recovery struggles to gain traction. This comes as the country’s consumer price index (CPI) rose by a mere 0.3% year-on-year in May, unchanged from April and well below the government’s 3% target. “Amid still-weak domestic demand, we expect CPI inflation to stay slightly above zero in the near term and producer price index (PPI) inflation to be slightly less negative on a low base,” Japan’s Nomura Global Markets Research said in a note. China’s headline inflation rate is projected to remain positive but stay mild under 1% until the third quarter of this year, said Ho Woei Chen, an economist with Singapore-based UOB Global Economics & Markets Research. “The deflation in the fourth quarter of 2023 will provide a low base for CPI to rebound more strongly in the last quarter of the year,” Ho said. UOB’s full-year forecast for China’s headline inflation is at 0.7% for 2024, compared with 0.2% in 2023, “but current trajectory suggests that the risk is to the downside”, she added. Meanwhile, factory gate prices continued their downward spiral, with the PPI falling for the 20th consecutive month in May. The PPI declined by 1.4% year on year in May, a slight improvement from the 2.5% drop in April. “The pace of PPI deflation is expected to ease but this had been slower than expected as oil prices stayed muted and overcapacity in some industries weighed on the prices of manufactured goods,” Ho said. “Increasing tariffs imposed on Chinese goods may further delay the price recovery.” The persistent low inflation is a stark contrast to the high inflation plaguing Western economies, further fueling fears of deflation as China grapples with sluggish consumer spending – a key obstacle to the country’s uneven recovery from the pandemic. While inflation is likely to remain low in the second quarter, it should begin to pick up in the second half of the year, Dutch banking and financial information services provider ING said in a note. “Although inflation is set to pick up this year as the drag from falling food prices fades, it is anticipated to remain well below target amid slowing consumption and weak demand pressures,” the World Bank said in its June Global Economic Prospects report released on 11 June. “Producer price pressures are also set to remain weak in the context of subdued activity and softening prices for commodities, particularly energy and metals.” China’s economic growth is projected to ease to 4.8% in 2024, down from 5.2 percent in 2023, as activity is expected to soften in the latter half of this year, according to World Bank estimates. While a potential uptick in goods exports and industrial activity, bolstered by a global trade recovery, is anticipated, this will likely be counterbalanced by weaker domestic consumption, it added. “We expect domestic and external demand to continue diverging over the near term, as the property fallout sustains and the economy rebalances itself,” Nomura said. “Export growth is likely to remain resilient in the near term, thanks to a low base, the resilient US economy, the global tech upswing, the price advantage of Chinese products and some front-loading ahead of scheduled or threatened tariff hikes.” Focus article by Nurluqman Suratman

HOUSTON (ICIS)–The US labor market has cooled from its overheated conditions two years ago, but the Federal Reserve still wants more signs that inflation is approaching its goal of 2% before it starts lowering its benchmark interest rate, the chairman of the central bank said on Wednesday. Earlier, the Federal Reserve voted to maintain interest rates at 5.25-5.5%. It also lowered its forecast for future rate cuts to one quarter-point decline, down from three in its last forecast in March. The Fed also slightly increased its forecast for inflation. The US central bank has a dual mandate of promoting maximum employment and price stability. Earlier in the decade, the nation’s ultra-tight labor market contributed to wage inflation. The labor market remains strong, but it is gradually cooling and rebalancing, said Jerome Powell, Fed chairman. He made his comments during a press conference following the Fed’s interest rate announcement. Job openings remain high and exceed the number of unemployed people. Wages are running above a sustainable path, Powell said. Still, those job openings have fallen from even higher levels, he said. Increased immigration and higher rates of labor participation have helped restore balance in the job market. Powell said the current US labor market is comparable to the years immediately before the COVID-19 pandemic, when the unemployment rate reached multidecade lows. In addition to the cooling labor market, Powell highlighted the May consumer price index (CPI), a measure of inflation that was published earlier on Wednesday. Month on month, the CPI was unchanged. “We welcome today’s reading and hope for more like that,” Powell said. The Fed itself noted that inflation has made modest progress in recent months in approaching its 2% target. Still, Powell stressed that the Federal Reserve needs more signs that inflation is under control before it will start loosening monetary policy and lowering rates. In fact, when data like the CPI is released on the same day that the Fed publishes its economic forecasts, most members do not update their projections, Powell said. “You don’t want to be too motivated by a single data point.” The need for more data helps explain why the Fed increased its forecast for 2024 inflation while noting modest progress towards meeting the 2% goal. That progress took place in recent months. Progress needs to continue before the Fed is confident that it can start lowering interest rates without triggering an even faster rate of inflation.

LONDON (ICIS)–Germany’s auto industry is opposed to tariffs on electric vehicles (EVs) from China, trade group German Association of the Automotive Industry said on Wednesday. The group, known as VDA in its German acronym, was reacting to a European Commission proposal of tariffs on battery electric vehicles (BEVs) from China after an investigation concluded they benefited from unfair subsidies. VDA said the proposed tariffs were not the right tool to strengthen the competitiveness of Europe’s auto industry. Instead, the tariffs would further escalate the risk of trade conflicts, to the detriment of Germany’s automakers, it said. “The fact is that we need China to solve global problems,” in particularly in dealing with the climate crisis, it said. China played a crucial role in a successful transformation towards electromobility and digitalization, and a trade conflict would jeopardize this transformation, the group said. However, VDA added that the extent of the subsidies China grants EV makers was “a challenge” for Europe and it called on China to make “constructive proposals” to settle the dispute. Germany ranks first in Europe and second after China globally in terms of EV production, and the bulk of German EV production goes into export, according to VDA data released this week. Industry observers have noted that Germany-based EV production relies on imports of materials and batteries from China. The US last month announced tariff hikes on Chinese imports of EVs, batteries and other materials, starting 1 August. In related news, the business climate in Germany’s automotive industry deteriorated in May amid fears about impacts on German automakers from the conflict with China, according to a recent survey by Munich-based ifo research. The automotive industry is a major global consumer of petrochemicals that contributes more than one-third of the raw material costs of an average vehicle. The automotive sector drives demand for chemicals such as polypropylene (PP), along with nylon, polystyrene (PS), styrene butadiene rubber (SBR), polyurethane (PU), methyl methacrylate (MMA) and polymethyl methacrylate (PMMA). Additional reporting by Graeme Paterson Please also visit the ICIS topic page Automotive: Impact on chemicals Thumbnail photo shows a Volkswagen EV; photo source: Volkswagen