The European Union is considering bloc-wide purchase incentives for electric vehicles to support the bloc’s struggling automobile manufacturers, German Chancellor Olaf Scholz said at the Davos gathering. 
With Europe’s car industry sagging in part because of low demand for EVs, the region’s carmakers are facing a new challenge now that President Donald Trump is looking to eliminate subsidies and other policies aimed at accelerating the adoption of cleaner cars in the US.
Scholz was also promoting a key part of his Social Democratic Party’s platform for the upcoming German elections to spur purchases of EVs produced in Germany with a temporary tax deduction. —Joshua Gallu

What You Need to Know Today

Volodymyr Zelenskiy praised Trump’s inaugural pledge to expand US energy exports, saying “we need to make sure no European country is dependent on a single energy supplier – especially not Russia.” The Ukrainian president spoke a day after Trump was sworn in, opening a chapter of uncertainty for Kyiv, which heavily depends on military aid from Washington. Trump had earlier signaled that he planned to end the war in the first months of his presidency, but hasn’t said how. Follow the latest on Trump’s second day in office in our live blog.

Sergio Ermotti is pushing back against against the Swiss government’s proposals to  make it hold more capital, arguing that the design of new rules is over the top and will hurt competitiveness. The UBS CEO told Bloomberg the requirement to maintain 100% backing of its foreign units would be “an extreme overreaction.” The government is due to finalize its proposals in the coming months to address the low capital requirements that contributed to Credit Suisse’s downfall in 2023. Watch the interview here.

Sergio Ermotti during an interview at Bloomberg House at Davos. Photographer: Chris Ratcliffe/Bloomberg

Inflation in Europe should near its 2% target rate by mid-2025, allowing the European Central Bank to lower interest rates to levels that no longer weigh on the economy, Governing Council member Joachim Nagel told Bloomberg. “We are on a good path to our target,” he said. Earlier, France’s Francois Villeroy de Galhau said there’s a “plausible consensus” that the ECB will continue cutting at each meeting, reiterating that the deposit rate may reach 2% by the summer. Watch the interview here.

US investors are on the hunt for deals in Europe thanks to a strong dollar, an easier regulatory regime and a widening gap in the multiples at which international companies are being valued, according to Vis Raghavan, Citigroup’s top investment banker. European stock markets have lagged the US, creating attractive acquisition targets. “You have gems of companies — sometimes we call them good houses in bad neighborhoods,” he said on Bloomberg TV. 

Israel started a major operation in the West Bank city of Jenin, adding to fears that attention is shifting from Gaza to the larger of the two Palestinian territories. At least seven Palestinians were killed in the raids and another 35 people were injured, according to the Palestinian health ministry. The mission comes as a six-week ceasefire with Hamas in Gaza got underway on Sunday. 

Investor confidence in Germany fell more than expected before next month’s snap election, underscoring persistent doubts in the country’s ability to escape its current bout of stagnation. Europe’s biggest economy contracted for a second straight year in 2024, with forecasts for 2025 only pointing to meager growth. Companies that make up the backbone of the German economy are putting borrowing plans on hold, with sales of a local debt product dwindling amid a gloomy economic outlook.

Russia’s seaborne crude exports saw their biggest drop since November last week after the US imposed sweeping sanctions on the country’s oil trade. Since the latest penalties were announced, there have been several signs of disruption, with tankers diverting, buyers looking elsewhere and an emerging shortage of un-sanctioned vessels available to load cargoes at Kozmino, Russia’s most important eastern port.

What You’ll Need to Know Tomorrow

For Your Commute

The US goes to court today to argue that a sanctioned billionaire is the true owner of a superyacht it seized in 2022, as the government goes after the assets of wealthy Russians behind the war in Ukraine. The yacht, which costs almost $750,000 a month to maintain and insure, is in US custody in San Diego as the legal battle drags on. The government is seeking to make sanctioned billionaire Suleiman Kerimov forfeit it. But another Russian, who isn’t under US sanctions, claims he’s the owner of the boat, and he’s trying to get it back.

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