Ferrari’s First EV, the $640,000 Luce, Fails to Impress

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0:33British energy company BP removes its chairman after concerns about bullying. Plus, the housing market's latest problem, soaring costs for materials like copper.

0:43Ryan Dezember:Data centers, the EV makers, the electrification build-out is colliding with home builders. And Ferrari launched its first electric car. The$640 ,000 Luce failed to impress investors. It's Tuesday, March 26th. I'm Imani Moise for The Wall Street Journal, filling in for Alex Osula. This is the PM edition of What's News, the top headlines and business stories that move the world today. We start today's show with leadership turmoil at BP. The British energy giant has removed its chairman, Albert Manifold. WSJ has learned that the board was told he was verbally abusive to both junior and senior employees.

1:22The board also believes that he shared privileged information with people who weren't supposed to have it. Manifold didn't respond to requests for comment. The company has now had three chief executives and three chairmen since 2023. BP shares today dropped 4 % in London. And in Spain, Jonathan Andik, the vice president of fashion chain Mango, is temporarily leaving his role. Last week, a judge accused him of being criminally responsible for his billionaire father's fatal fall during a hiking trip near Barcelona. Andik said today that he was stepping aside to focus his energy on proving his innocence.

1:58Mango chief executive Tony Ruiz says he supports Jonathan Andik. He said that he expects that the traditional process will be resolved quickly and favorably. Turning to aviation, Delta Airlines is scrambling to hire more pilots. A jump in flight cancellations is jeopardizing its reputation for reliability. Data from aviation analytics firm Sirium show Delta's domestic cancellation rate has been running above the industry average. and the airline's senior vice president of flight operations, Ryan Gumm, said in an April memo that cancellations tied to pilot availability are happening at more than 10 times historical levels.

2:33Delta is now trying to shore up operations ahead of the busy summer travel season. Stock markets were mixed today, with gains in chip and memory stocks helping the Nasdaq close up 1.2 percent. The S &P also climbed, while the Dow slipped 0.2 percent. In the housing market, high prices for materials are making it more expensive for companies to build homes. WSJ reporter Ryan Dezember joins us now to discuss how the run-up in commodities is making an affordability crisis even worse. So Ryan, we've been feeling the burn of inflation for a while now, but the latest data is pretty staggering. In your story, one economist says that prices for materials used in homes like copper and wood rose more in the first four months of 2026 than they did over the entire previous three years combined.

3:20So how is that impacting the housing market?

3:23Ryan Dezember:You know, it takes a while for this stuff to flow through. But what we're seeing now is some of the builders' biggest costs after the land and the construction labor are the materials, lumber, copper. The average American home has more than 400 pounds of copper. You know, at record prices for copper, that adds up. Aluminum is nearing record prices. You also, of course, have the fuel costs. Diesel's up roughly 50 percent from before the war started. And so you have a lot of that being passed on. So it's all adding up and really adding to the price tag for building a home. Does that mean that the price tag for homebuyers is also going to go up?

4:00Ryan Dezember:Pulte, one of the big homebuilders, talked about this on their last earnings call where, you know, they're very careful to say the cost of building a home is going up. They haven't necessarily committed to passing all that on. For the past really two years or so with high interest rates, we've had builders giving a lot of concessions to buyers to get homes sold and keep their crews moving and building. We could see more of that. So it's sort of to be determined on whether that will balloon the price tag that homebuyers pay later this year or if builders will absorb some of that. The war and tariffs have pushed prices for some materials higher, but also the AI boom.

4:38Can you connect the dots between AI and housing?

4:40Ryan Dezember:Well, it's a copper wire, basically. Data centers consume a huge amount of copper, and there's only so much copper in a given year that's produced. You also have a big disruption going on right now. The world's second largest mine, it's in Indonesia. There was a fatal mudslide last year. While the mine has been restarted on time, the full output will take longer because of some additional problems. So that's a big chunk of copper that the world won't have. So that's an example of a building product where data centers, the EV makers, the electrification build-out is colliding with home builders.

5:20That was WSJ reporter Ryan December. Thanks, Ryan.

5:23Ryan Dezember:Thank you.

5:27Turning to the war, Iran is staying at the negotiating table with the U.S. despite fresh military clashes. Tehran is pushing for access to frozen assets to ease pressure on its spattered economy and to access world oil markets. Iranian officials and Arab mediators say the country is trying to strike a delicate balance, securing economic relief without giving President Trump a clear diplomatic win. A White House official says President Trump has scheduled a cabinet meeting at Camp David tomorrow. The agenda will include the economy and an anti-fraud task force, as well as foreign policy. Coming up, weight loss drugs are blowing holes in city budgets across the country.

6:06Plus, the latest reality TV star hoping to turn ratings into votes. That's after the break.

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6:51Breakthrough weight loss drugs are helping people drop pounds across the country. But at what cost? Public employers, that is, cities and towns, from New York to Texas, say GLP-1 medications like Ozempic and Wegovi are putting enormous pressure on already stretched budgets, squeezing money for local needs like roads and schools. WSJ reporter Owen Tucker-Smith spoke with officials in Belchertown, Massachusetts, where this issue recently came to a head. Belchertown gets its health care through this kind of regional trust where a lot of towns pool together their resources, but their health care costs were going out of control.

7:26And they realized that a big part of it was the surging cost of GLP-1s. And it got so bad that the trust reserves were starting to run out. And last year, they sent out these notices to towns like Belchertown telling them, this is unsustainable and we're needing everyone to basically chip in in the middle of the year. So they imposed a mid-year rate increase, which crippled a lot of these towns' finances. Belcher Town got hit with roughly$900 ,000 of expenses. And this is a town of just$15 ,000. So$900 ,000 is a lot of money for them to find. And they're already stretched thin budget. Owen says when health care costs jump this fast, there are consequences for the towns.

8:05You often have to dip into your reserves. And so it's harder for a city to say, let's do that big bridge repair that we've been talking about, or let's increase hiring. So even if you personally aren't using GLP-1s, you might feel the impact if you have a child in the school district and they're going to in some way feel the impact of these budget cuts. In many cases, these towns are starting to cut coverage or say, you can only use these drugs and get them covered by us if you are diabetic, not just for weight loss. While the direct-to-consumer prices can be lower than they were once, they, as employers and their health insurance plans, are still paying these higher prices.

8:46But they are optimistic that as these prices come down, A, it'll be less of a burden on a city, but B, if they do cut coverage, their employees might be more able to access the drugs on their own. As you heard this morning, voters in Texas are headed to the polls today. There's a closely watched Republican Senate runoff between incumbent Senator John Cornyn and Attorney General Ken Paxton, who won Trump's endorsement. The winner will face Democrat James Tellarico in November. And WSJ reporter Elizabeth Vindell says the race is giving Republicans some headaches. It is seen as significant that Texas is even being viewed as somewhat in play this year.

9:28Democrats have not won a statewide seat in Texas since 1994. So the prospect of Paxton as a nominee has been concerning to a lot of national Republican groups because he has a history of past controversies.

9:44Ryan Dezember:And so it's possible he could make them more vulnerable in Texas or they could just have to spend a heck of a lot of money for him to win, which could affect how they are able to defend other states. Polls close tonight at 7 p.m. Texas time. Go to WSJ.com for results and more analysis. And now we look at California, where a former reality TV star, Spencer Pratt, Pratt, known as the guy everyone loved to hate on the hills, is shaking up the Los Angeles mayor's race. Since losing his home in last year's Palisades fire, Pratt has launched an attention-grabbing campaign focused on issues like homelessness, public safety, and frustration with current city leadership.

10:25Pratt, a Republican, is running a flood-the-zone campaign heavy on social media moments.

10:39And podcast appearances, including the Joe Rogan experience.

10:44Ryan Dezember:So if you're just like a young 20-year-old looking around, you're like, oh my God, there's zombies everywhere, rents so much, all the restaurants are closing. This system doesn't work. But what they're not looking at is who's breaking the system that did work, the one that I grew up in. The city hasn't elected a Republican mayor in nearly three decades. And today, fewer than 15 percent of Los Angeles city voters are registered Republicans. The current mayor, Karen Bass, is running for re-election. The latest polling shows she's leading the field. Pratt and city council member Nithya Rahman are battling for second place ahead of next week's primary.

11:18The top two finishers will advance to a November election if no candidate wins a majority of votes. And finally, are ultra-wealthy car buyers ready to trade horsepower for kilowatts? Ferrari's first all-electric vehicle, the Luce, is a$640 ,000 car designed with former Apple designer Johnny Ive. And it sparked an uproar. Ferrari shares tumbled 8 % today, wiping out more than$5 billion from the market cap of Europe's most valuable automaker. WSJ reporter Ben Katz explains.

11:50Ryan Dezember:A lot of that slump has really been driven by the backlash. We've seen a lot of, you know, the trolling that you might expect to see online. design but we've also had some conversations with owners seen some posts from people who are collectors who are really skeptical about specifically the exterior design of this Ferrari. Ferrari saying you know what we did an SUV we once said we'd never do an SUV and that also you know was criticized and it ends up being one of their best-selling vehicles they see a similar opportunity an electric car something they said 15 years ago they would never do it's being slammed from kind of all sides.

12:26Ryan Dezember:They're saying, once that all calms down, we think we've got a winner on our hands. But of course, the initial reaction, I think, has kind of spooked investors a little bit, thinking, you know what, maybe this isn't the Ferrari of old. Maybe there's something new here that we aren't quite aligned with. Ferrari stands for sports cars that you can hear before you actually see them.

12:47But Ferrari's new EV doesn't have a combustion engine to rev.

12:50Ryan Dezember:Ferrari describes this car as having an external amplification system, which it describes as kind of akin to an electric guitar. They don't want to manufacture the sound of a combustion engine, you know, when it doesn't have a combustion engine. But it wants people to be able to hear the electric motors at work. And that's what's news for this Tuesday afternoon. Today's show was produced by Anthony Bansi with supervising producer Talia Arbel. I'm Imani Moise for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.

13:49Ryan Dezember:they may affect your finances and portfolio. Listen at schwab.com slash Washington Wise.