More than £3.5bn was wiped off the value of car giants Ford and GM this afternoon after analysts warned that Western carmakers would struggle to keep up with Chinese rivals. Shares in GM fell as much as 6.
4pc, while Ford dropped as much as 5.1pc. Investors sold after Morgan Stanley issued a warning that the carmakers would be among those to struggle to keep up with the Chinese in developing the artificial intelligence software needed for the next generation of cars.
The bank said that the capital required to compete in artificial intelligence will require carmakers to find “tens of billions ...
We question the financial ability of most auto companies to create proprietary AI models to augment their operations”. Morgan Stanley warned that vast factory capacity in China meant the Asian giant would flood global markets. The analysts said that China is already manufacturing nearly 9m units more than it sells at home.
The “China capacity ‘butterfly’ has emerged and is flapping its wings”, the investment bank warned. “Tariffs will work for a bit but not for long, and there will likely be retaliation and indirect pressure. China-made EVs continue to expand into export markets, rivalling global peers with superior affordability, variety and (increasingly) quality,” the bank said.
06:15 PM BST Signing off...
Thanks for joining us on the Markets blog today. We will be back in the morning - but you can . 05:40 PM BST FTSE stocks falter despite OECD upgrading Britain’s.