Data: Yahoo; Chart: Axios Visuals

A Morgan Stanley note Tuesday pegged the value of General Motor's nascent electric vehicle business at $20 billion, a tally well above the firm's assessment of GM's core gasoline-powered lines.

Why it matters: It signals analysts' view that revenues from electric vehicles and battery tech are going to be a big thing despite what's now a tiny market share, but it's unclear who the long-term winners will be.

  • Tesla now has a market capitalization of $362 billion (!) after its stock closed at an all-time high of $1,887-per-share Tuesday.
  • Just yesterday the fledgling player Canoo, which is planning an untested subscription service and hasn't built anything yet, announced a $2.4 billion deal to go public.
  • Several electric vehicle startups are raising lots of money, including the private Rivian, which raked in another $2.5 billion earlier this year, while the electric truck company Nikola Motor has seen its share price climb since it began publicly trading in June.

The intrigue: The note from Morgan Stanley's Adam Jonas comes amid buzz about the idea that GM might spin off its electric vehicle business into a stand-alone unit (an idea that Axios' Joann Muller explored recently).

  • GM is betting big on electric vehicles, with plans to have 20 fully electric models by 2023.

Driving the news: GM's stock jumped earlier this week on the strength of a Deutsche Bank report Monday that suggested the value of a stand-alone electric vehicle unit could even be way above what Morgan Stanley estimates.

  • The Morgan Stanley note also concludes a spinoff is a good idea. "[T]he autonomy between the two units can liberate each other of various impediments to efficient capital allocation and talent development," Jonas writes.

What they're saying: A CNBC headline on the topic sums it up: "Wall Street pushes for GM to spin off its electric vehicle business."

The big picture: Morgan Stanley analysts assess the stock's value at $46-per-share, well above where it's currently trading, and their "bull case" is far higher.

  • Their note — which acknowledges lots of uncertainty — is an attempt to size up the long-term potential of GM's electric vehicle technologies, notably the company's new "Ultium" battery and propulsion system, which it is using internally and as a product to sell to other automakers.
  • They see opportunities and pitfalls — and a substantial revenue opportunity. With lots of caveats, the note sees $22 billion in annual revenue by 2030 and $74 billion in 2040.

Go deeper

Ben Geman, author of Generate
Sep 17, 2020 - Energy & Environment

Ford's electric F-150 plans come into focus

Screenshot of the electric Ford F-150 from a promotional video. Courtesy of Ford

Ford is offering more info about the design and strategy around its long-awaited entry into the electric truck market, the battery-powered F-150 pickup arriving in mid-2022.

Why it matters: There's new capital coming into the increasingly competitive electric pickup race, with Tesla, Rivian and others bringing new models to market over the next couple of years.

Amy Harder, author of Generate
Sep 17, 2020 - Energy & Environment

How sudden geopolitical events bring about long-term changes in oil use

Expand chart
Reproduced from Morgan Stanley; Chart: Axios Visuals

Sudden changes in world politics can bring about permanent changes in oil-and-gas use, per a recent Morgan Stanley report.

Driving the news: Geopolitical unrest in the late '70s and early '80s — the Iranian Revolution and start of the Iran-Iraq war — disrupted a lot of oil supply that, in turn, sent prices skyrocketing. That sudden jolt to the global oil system permanently cut oil consumption per capita that’s stayed with the world ever since, says Martijn Rats, managing director for equity research for Morgan Stanley.

Amazon stakes climate tech startups

Illustration: Sarah Grillo/Axios

Amazon just named the first recipients of money from the $2 billion venture fund it rolled out in June to help companies develop climate friendly technologies.

Driving the news: Amazon, which has pledged to have "net zero" emissions by 2040, said on Thursday morning initial recipients are...