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Company and partner BioNTech are also developing an updated version of their vaccine to better protect against Delta variant

Pfizer Inc. PFE -0.25% will seek clearance from U.S. regulators in coming weeks to distribute a booster shot of its Covid-19 vaccine to heighten protection against infections, as new virus strains rise.

The company also said it plans to start clinical trials in August of an updated version of its vaccine that would better protect against the Delta variant.

Pfizer and partner BioNTech BNTX 0.97% SE said Thursday that they will seek authorization for the third shot, based on encouraging initial study data.

The companies said the data showed that a booster shot given at least six months after the second dose produced antibodies protective against the original strain of the virus and a more recent strain, Beta.

The companies said the antibody levels were five to 10 times higher than after two doses.

The companies said they expect their booster shot to provide similarly higher levels of protection against the Delta variant.

In addition, Pfizer and BioNTech said they have begun producing the updated vaccine for testing in people.

“While we believe a third dose of BNT162b2 has the potential to preserve the highest levels [of] protective efficacy against all currently known variants including Delta, we are remaining vigilant,” the companies said, using the code name for their original vaccine.

The moves are the strongest sign to date of vaccine makers’ efforts to confront new variants of the virus better able to elude existing shots.

To date, companies have been evaluating the effectiveness of their shots against new variants and working on boosters and new vaccines targeting the strains.

Pfizer and BioNTech are the first to say they will ask regulators to authorize a booster that could increase their vaccine’s protection against the strains.

It isn’t clear, however, whether vaccine experts would recommend that most people receive a third booster shot if one was authorized by the FDA.

Federal health officials signaled they would take a cautious view toward authorizing booster shots, which they said aren’t currently necessary.

“Americans who have been fully vaccinated do not need a booster shot at this time,” the Food and Drug Administration and Centers for Disease Control and Prevention said in a joint statement issued Thursday evening. “FDA, CDC, and NIH are engaged in a science-based, rigorous process to consider whether or when a booster might be necessary.”

The agencies said they might look at data from pharmaceutical companies but wouldn’t rely on that data exclusively. They also said Covid-19 vaccines provide strong protection against the Delta variant.

“People who are fully vaccinated are protected from severe disease and death, including from the variants currently circulating in the country such as Delta,” the agencies said. “Virtually all Covid-19 hospitalizations and deaths are among those who are unvaccinated.”

Monica Gandhi, a professor of medicine and infectious disease specialist at the University of California, San Francisco, said that booster shots aren’t necessary except for those who have compromised immune systems and the very elderly.

Recent peer-reviewed studies, she said, have shown that two shots of the Pfizer vaccine are adequate to protect against variants including Delta.

“I am very concerned that there is a profit motive for this announcement, rather than sound scientific reasoning,” Dr. Gandhi said. “I would encourage Pfizer to work on producing more mRNA vaccines for the world to help diminish the chance of future variants.”

Antibody levels would be expected to go down several months after vaccination as the immune system revs down, said Ronny Gal, a Sanford C. Bernstein pharmaceuticals analyst. Yet the immune system retains the ability to remobilize protective antibodies if they are exposed to the virus again in the future, helping prevent severe illness even if there is infection, he said.

For now, Mr. Gal said he doesn’t expect widespread use of booster shots if they are authorized unless new evidence emerges that two shots stop protecting against illness.

The Pfizer-BioNTech vaccine was the first to be authorized in the U.S., and has been cleared for use in people 12 years and older.

Studies have indicated that the shot protects well against new variants of the virus that have emerged since the companies began developing their original version, especially after the second dose.

The vaccine doesn’t offer as much protection after the first of two doses, however. And the companies said that it appears that the vaccine’s effectiveness begins to wane about six months after the second dose, based on their own clinical trials and recent data released by the Israeli Ministry of Health.

Israel said earlier this week that the shot protected 64% of inoculated people from infection during an outbreak of the Delta variant, down from 94% before.

The vaccine still provided 94% protection against severe illness during the outbreak, compared with 97% before, the health ministry said.

The Delta variant was first identified in India, where cases caused by the strain overwhelmed the country’s hospitals.

Since then, it has spread rapidly around the globe, including in the U.S.

This week, federal health officials said it was now the most common strain in the U.S.

The variant appears to be more contagious than earlier versions of the virus and better able to evade vaccines.

Health authorities have encouraged people to be vaccinated to better ward off the Delta variant, saying more than 99% of Covid-19 deaths in the U.S. are among the unvaccinated.

Can Wizz challenge Ryanair as king of Europe’s skies?

Hungarian carrier’s breakneck expansion threatens Irish rival in battle for low-cost market

For years Michael O’Leary has been the undisputed king of the European skies.

The Irish executive has grown Ryanair from a low-cost upstart into the region’s dominant airline by offering cheap fares through an ultra-efficient business model that rivals have been unable to match.

But when the aviation industry emerges from the rubble of the pandemic, O’Leary will have competition.

Hungarian carrier Wizz Air has an equally low-cost business and is set on continuing a period of breakneck expansion and moving further into western Europe.

Even while the rest of their industry crumbles, O’Leary and Wizz Air chief executive József Váradi have spent the past year touting the opportunities emerging.

Both airlines are taking on new aircraft, scooping up take off and landing slots and opening new bases, while rivals with weaker balance sheets such as Alitalia and Norwegian Air Shuttle retrench or collapse.

Neither is immune to the immediate impact of the pandemic, and both companies have bled hundreds of millions of euros over the past year.

But their shares have recovered from heavy losses and are close to all-time highs, a sign that investors agree that low-cost is the future of European aviation.

For the confident O’Leary this is nothing less than “the greatest growth opportunity” in Ryanair’s 35-year history, particularly as he expects there to be a 20 per cent fall in the number of short-haul seats available from rivals in Europe over the next few years as they shrink.

Varadi, a fast-talking Hungarian, is less dramatic but equally confident. “We think we are going to be a much . . . more competitive airline and more formidable competing force post pandemic,” he said.

The scale of FTSE 250 listed Wizz’s ambition was revealed last week when shareholders were asked to back a blockbuster pay plan, which will hand Varadi a £100m bonus if he increases the airline’s share price from £48 to £120 over the next five years. That would give it a market capitalisation of nearly £12bn, about a third smaller than Ryanair’s now.

The company listed in London at £11.50 in 2015, but its shares have rocketed as investors have welcomed the first serious low-cost competition to Ryanair to emerge and “the last great growth story in European aviation”, according to Bernstein aviation analyst Daniel Roeska.

Varadi has masterminded Wizz’s growth from the beginning. With a background as an economist and a career at Procter & Gamble and Hungarian carrier Malev behind him, he approached American investor Bill Franke in 2004 with a plan for a regional airline.

Franke, one of history’s most successful aviation investors and an early backer of Ryanair too, persuaded him to adopt the low-cost model and within six weeks Varadi had presented him with a new business plan.

“I liked József, he is a smart guy, a direct guy and we ended up making an investment,” Franke remembered.

“It has been a very successful model, and we have for a private equity fund been unusually long tenured . . . We are now at 17 years and it has been a significantly favourable investment for us.”

Wizz’s corporate structure, with a London listing, Hungarian base for cheap labour and Swiss tax registration has left it the only airline to be able to match, and in some places beat Ryanair’s ultra low cost operating model.

London-listed easyJet competes with legacy carriers at expensive airports and is not considered ultra-low-cost, while airlines such as British Airways are more reliant on long-haul and business travel.

Both Ryanair and Wizz claim to have the lowest unit cost in the industry, but analysts at Bernstein believe Wizz just has the edge, although O’Leary in his typical forthright manner dismisses this as “bullshit” based on theoretical future fleets.

Wizz’s growth has been fuelled by stimulating demand for flying and connecting cities in central and eastern Europe, where analysts believe there are still opportunities as economies grow.

The Hungarian airline has also moved into parts of western Europe, and has opened several bases in the UK. But to hit his target Varadi will inevitably have to move further into Ryanair’s turf.

“The jury is still out. Wizz is being more aggressive in bringing capacity back in this year, but they are not filling it to the extent Ryanair is,” said aviation consultant Edmond Rose.

O’Leary concedes Wizz has a “reasonably compelling growth story”, has respect for the way Varadi runs the business, and sees “niches” for Wizz. But he rejects the idea that it could challenge his dominant position.

“To be fair, they are good on this schlock about oh, you know, we’ve got lower costs than Ryanair, and therefore ultimately we’re going to replicate Ryanair returns over the last 20 years . . . the real difficulty for the Wizz model is that they can’t explain how the hell you can expand dramatically in western Europe when Ryanair is already there.”

While Wizz plans to take on new aircraft in the coming years to grow its fleet from about 140 to 270 planes, O’Leary has an order for more than 200 new aircraft from Boeing, which he notes is “the same size as Wizz’s whole bloody fleet” and will leave Ryanair with 600 planes by 2026.

Varadi is more diplomatic and has been briefing investors that there is space for both to grow.

“I think the real question is what is going to happen to the others who don’t have the cost base and the capacity to grow,” he said. “I am sure Ryanair will do great coming out of the pandemic, but I think we will be doing even better.”

Arguably, the key question facing Wizz is whether it can preserve its low-costs as it moves into western European airports, with pressure over unionisation and wages, challenges that Ryanair had to face as it matured.

For Franke, competition is inevitable. He counts O’Leary as a friend, but added: “We are not intimidated or afraid of Ryanair.”

Even O’Leary believes Wizz is a better proposition for an investor than any other airline in Europe. Except one, of course. “I would say to anybody investing in Wizz, why are you not investing in Ryanair?”

PSA-Fiat Chrysler tie-up makes electrified cars a priority, as CEO Carlos Tavares gets ready to take on General Motors and Volkswagen

Global auto-making giant Stellantis NV said it plans to spend more than $35.5 billion through 2025 to release an array of new plug-in models, the company’s boldest statement yet on how it plans to compete in the industry’s intensifying electric-vehicle race.

The car company, formed earlier this year through the merger of Fiat Chrysler Automobiles NV and France’s PSA Group, also plans to get more involved with battery development and sourcing, aiming to drive down costs on one of the most expensive components for an electric car.

Executives said Thursday its strategy would support the establishment of five battery factories in North America and Europe and it aims to offer electrified options under all 14 of its brands, which include Jeep, Ram, Peugeot and Citroën. Among the new models planned are an electric Ram truck, expected to arrive in 2024, and an electric Dodge muscle car to be released that same year.

“This electrification journey is possibly the most important brick in our long-term plan,” said Chief Executive Carlos Tavares during a presentation to analysts and journalists.

The company’s rollout of its plans did little to excite investors. Stellantis shares slid 3.1% to $18.98 on Thursday.

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In recent months, other major car companies have upped their bets on electric vehicles as tougher tailpipe-emissions regulations globally are prodding manufacturers to pivot from their more-than-century-old model of selling gasoline-powered vehicles. The move is also being driven by rising enthusiasm on Wall Street for the technology as investors look to bet on the next Tesla Inc. TSLA 1.27%

Several weeks ago, General Motors Co. increased its planned spending on electric and autonomous vehicles—its second boost in less than a year—raising it to $35 billion through 2025. The increase reflects the addition of two more battery factories, on top of ones already planned for Ohio and Tennessee.

Electric-vehicle entrepreneurs are working on the industry’s biggest bottleneck: charging infrastructure. Companies are building more chargers, but it might not be enough to make electric vehicles work for people who can’t plug in at home. Photo illustration: Carlos Waters/WSJ

Ford Motor Co. also has become more aggressive, unveiling in May an all-electric version of its bestselling vehicle, the F-150 truck. It plans to invest $30 billion in electric vehicles through 2025.

Meanwhile, Volkswagen AG VOW -3.84% is spending about $40 billion through mid-decade on electric vehicles.

Jefferies analyst Philippe Houchois said that while Stellantis’s presentation provided some key details about its plans, it still felt similar to what others already have in the works—and in some areas, the company appeared behind. For instance, the electric Ram pickup truck isn’t set to arrive until 2024, long after many key rivals, he said. Ford plans to release its electric F-150 Lightning next year.

“They have ambitions which are shared with everyone in the industry,” he said. “They claim they will do it more cheaply, which is great, but we are going to see.”

Mr. Tavares, who took the top job at Stellantis in January upon the merger’s completion, has made providing a clear path forward on electric vehicles a priority for the newly formed company.

Earlier this year, the company pledged to offer an electrified version of almost every model in its lineup by 2025. On Thursday, it said by 2030, 70% of its vehicle sales in Europe and more than 40% of its sales in the U.S. will be electric models—targets that analysts say are among the industry’s most ambitious.

Still, Stellantis has been widely seen by analysts as lagging behind many of its competitors on electric vehicles, in part because Fiat Chrysler had been slower to invest in the technology before the tie-up and its lineup is more tilted toward muscle cars and heavier trucks and sport-utility vehicles.

Executives have promoted the merger as giving both companies the scale and resources needed to compete in a sector where investment in costly new technologies, such as battery-powered cars, has become a necessity. Stellantis has said the merger is expected to deliver $6 billion in savings annually, much of which will be spent on efforts to add more plug-in models to its lineup.

On Thursday, Stellantis executives outlined plans to electrify different sizes and types of vehicles, ranging from small cars to big trucks and SUVs sold under its Jeep brand. It also said it plans to offer two kinds of battery chemistries, a high-density option and a nickel cobalt-free alternative by 2024, as well as introduce solid-state battery technology by 2026.

The company plans to establish the battery factories through supplier partnerships, and in some cases it expects to use its existing manufacturing facilities for the production. For instance, in Italy it is converting one engine factory to make electric-car batteries, Mr. Tavares said.

The car company also previewed its financial results for the first half of the year Thursday. The company said its adjusted operating margins for the first six months of 2021 should be above its full-year guidance range of 5.5% to 7.5%, because of higher pricing and it selling a more profitable mix of models.

Stellantis said it expects free cash flow in the same period to be negative, attributing the results to lower planned production volumes as the auto industry grapples with a computer-chip shortage that is curtailing factory output.

Stellantis’s two biggest car markets—Europe and the U.S.—are expected to tighten regulations limiting tailpipe emissions in the coming years, putting pressure on the company to lessen its reliance on gasoline-powered vehicles. Governments are also offering more incentives to get auto makers to invest in electrics.

In the U.S., President Biden has called for $174 billion in electric-vehicle-related spending, which includes fresh federal tax credits for purchasing plug-in cars and commercial trucks.

Meanwhile, other car companies are moving quickly to put out electric vehicles and the marketplace is becoming more crowded, with startups such as Rivian Automotive and Lucid Motors Inc. moving closer to selling their first plug-in models. Tesla continues to expand globally and fortify its grip on the market with growing sales and new-model debuts.

Stellantis needs to prove to investors the company’s ambitions are backed up by models that will be ready in the near-term and on a timeline that is on par with industry rivals, Mr. Houchois said.

June sales were down 5.1% from a year earlier, ending an 11-month growth streak

China’s car sales snapped an 11-month streak of year-over-year growth as demand bolstered by a strong economic recovery collided with a global semiconductor shortage.

Sales of passenger cars in June were down 5.1% from a year earlier to 1.58 million vehicles, the China Passenger Car Association said Thursday. April-June sales were up 2.3% from the same period last year, when the market began to recover from a nationwide pandemic lockdown.

Much of the June decline could be attributed to supply constraints that have emerged in recent months, the association said. The historic chip shortage has crimped production for auto makers around the world, including some in China, the group said.

Japanese car makers were among the hardest-hit by the chip shortage last month. Nissan Motor Co. ’s China sales were down 16% in June from a year earlier, while Honda Motor Co. ’s were off 17%. Honda cited component shortages.

The car association said it expects supply constraints to ease in the second half of the year.

“The most severe moment has passed,” said Jenny Huang, corporate research director at Fitch Ratings, who expects chip supply to meet demand in 2022.

Ms. Huang said China-based car makers have mitigated the shortage’s effects by keeping sufficient inventories, ordering directly from chip makers and speeding up testing of domestically manufactured chips.

Bill Russo, founder of Automobility, a Shanghai-based consulting firm, said that the sales decline since the beginning of the year is a concerning sign for long-term demand. Chinese car sales returned to pre-pandemic levels in the first quarter of 2021 but have since slowed.

“There was some expectation or hope that the continued recovery would be there,” Mr. Russo said. “I don’t think we’re anywhere near that.”

Because of stringent virus-control measures, the Chinese economy recovered faster than other major auto markets, leading to an early rebound in demand. Iris Pang, chief economist at ING Bank, said that demand has been digested over the past 12 months; consumers interested in a new car have already bought it.

June sales were also affected by recent Covid-19 outbreaks in southern China, the car association said, with rising cases prompting some consumers to stay home.

Electric vehicles continued to gain traction, accounting for a record share of China’s auto market in June. Sales of electric cars more than doubled from a year earlier to 223,000 vehicles, the association said, about 14% of overall sales.

Tesla Inc. sold 33,155 made-in-China vehicles in June, about 85% domestically. The rest were exported, the association’s data showed.

China’s U.S.-listed EV trio each reported record sales in June. XPeng Inc., which made its debut on Hong Kong’s stock exchange on Wednesday, delivered 6,565 cars, seven times as many as a year earlier. Domestic rival Li Auto Inc.’s deliveries more than quadrupled in June, and NIO Inc.’s doubled, to about 8,000 vehicles each.

The electric-vehicle industry’s gains have put it on track to reach Beijing’s goal of 20% of new-auto sales before the 2025 target date, analysts said, though Fitch Ratings’ Ms. Huang said future growth would require government subsidies and policies that encourage production and consumer purchases.

How effective are coronavirus vaccines against Delta variant?

Real-world studies show Pfizer and AstraZeneca still offer strong protection against severe disease

As rising coronavirus infections force some countries to reimpose restrictions, scientists and drugmakers are racing to answer a crucial question: how well do the current vaccines protect against the Delta variant?

On one point, most observers agree. The leading shots, studies show, still offer strong protection against severe disease and hospitalisation.

“Real-world effectiveness studies with a number of vaccines show good protection especially against severe disease,” Soumya Swaminathan, chief scientist at the World Health Organization, told the Financial Times. “The most important priority just now is to scale up vaccination coverage in all countries.”

So called “real-world” analysis of 14,019 cases of the Delta variant in UK, released by Public Health England in June, found the BioNTech/Pfizer and Oxford/AstraZeneca vaccines were, respectively, 96 per cent and 92 per cent effective against hospitalisation after two doses.

Late on Thursday, Pfizer reiterated it believed its shot worked against Delta, especially after a potential third booster dose. But it also added it planned to study a variant-targeted inoculation, with trials slated to start as early as next month.

The high efficacy of the shots in the UK, where the Delta variant is dominant and more than the half the population has been fully vaccinated, is reflected in the current mortality rate for Covid-19 patients, which at about 0.1 per cent is “20-fold” lower than at its peak, according to Meaghan Kall, an epidemiologist at PHE.

But the question of whether the vaccines remain as effective at preventing infection, and therefore transmission and spread, is more fraught.

Early figures from the real-world studies in the UK in May found that two doses of the Pfizer vaccine were 88 per cent effective at preventing symptomatic infection with the Delta variant. A month later, that number was revised down to 79 per cent by Scottish researchers.

Canadian scientists on Saturday, using a combination of methods, estimated that the Pfizer jab was 87 per cent effective at preventing infection with the Delta variant. That was “comparable”, the researchers said, to the 89 per cent protection the shot provided against the Alpha variant, first identified in Britain.

A fourth study, compiled by Israel’s health ministry, details of which were reported this week, suggested the Pfizer vaccine was much less effective against symptomatic infection with Delta, providing only 64 per cent protection. Pfizer and Israeli health officials, however, were quick to caution that the study was based on preliminary and highly localised infection numbers, and had other methodological weaknesses.

The varied assessments reflect the difficulty of conducting real-world assessments of vaccine efficacy. During trials, scientists can select participants, monitor who receives a vaccine and who receives a placebo, and then see who gets infected and who does not, providing a trove of data. Once a vaccination campaign gets under way, scientists lose that control, and other factors may affect who gets sick, making it more difficult to reach firm conclusions.

“Observational vaccine study data are not randomised trial data,” Natalie Dean, an assistant professor of biostatistics at Emory University in Atlanta, Georgia, wrote on Twitter. The Israeli findings should not “negate” other studies that showed higher vaccine efficacy, she said, as the small size of the epidemic in Israel was one of several “fudge factors” that could impact results.

For other vaccines, however, real-world efficacy data does not exist yet, forcing health officials to rely on laboratory testing to assess effectiveness against Delta. In such studies, scientists use the blood of vaccinated individuals to estimate a shot’s effectiveness against a variant in a lab.

Moderna has said its vaccine showed a two-fold reduction in neutralising antibodies in laboratory tests against Delta, when compared with the original coronavirus strain, but still described the results as “encouraging”. The data “reinforce our belief that the Moderna Covid-19 vaccine should remain protective against newly detected variants,” Stéphane Bancel, chief executive, said in June.

Johnson & Johnson, which markets a single-shot vaccine, said its jab elicited a higher level of antibody activity against Delta than it had in tests against the Beta variant, first identified in South Africa. It provided no precise figures but said the vaccine offered “durable protection” against the disease.

The makers of Russia’s Sputnik V have said it was “more efficient against the Delta variant of coronavirus . . . than any other vaccine that published results on this strain so far”, but provided no evidence to support the claim.

Several Chinese scientists have said that some Chinese vaccines have been found to be less effective against Delta than against previous variants but few details of those studies have been released. Sinovac spokesman Liu Peicheng told Reuters that preliminary results based on blood samples from those vaccinated with its shot showed a three-fold reduction in neutralising effect against Delta.

Peter English, a public health expert who previously advised PHE, cautioned that while the data on efficacy against hospitalisation was generally positive, the vaccines’ ability to prevent the transmission of Delta was far less clear.

“Delta is so much more infectious, it’s better at finding people who aren’t sufficiently immune and infecting them,” he said, adding that it would take time for reliable numbers on transmission to accumulate.