(Oct 30): The best-performing sector in the global stock markets over the last two months has been neither internet technology nor oil. Rather, it is one that had been a laggard for years: automobile manufacturers. As investors chased up shares in fledgling electric carmaker Tesla, giants such as General Motors, Toyota Motor and Ford Motor saw their own fortunes decline.

Since mid-August, however, there has been a sea change in sentiment as investors have circled back to legacy carmakers in the realisation that they could actually take a significant chunk of the electric vehicle (EV) market. Shares in GM, which overtook Tesla as the most valuable car company last month, are up 34% over the past two months.

Not since Henry Ford introduced the moving Model T assembly line more than 100 years ago has the automotive industry seen such a fundamental transformation, says Sam Korus, a New York-based analyst for ARK Investment, which manages a range of tech funds. Increasing fascination with electrification, connected cars and autonomous driving has refocused attention on the global passenger car industry. “We are moving from car ownership to a new ‘Transportation as a service’ paradigm, where we will be able to rent autonomous, electric cars whenever we need them,” says Beijia Ma, a strategist for Bank of America Merrill Lynch in London.

To continue reading,

Sign in to access this Premium article.

Subscription entitlements:

Less than $9 per month
3 Simultaneous logins across all devices
Unlimited access to latest and premium articles
Bonus unlimited access to online articles and virtual newspaper on The Edge Malaysia (single login)

Stay updated with Singapore corporate news stories for FREE

Follow our Telegram | Facebook