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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

GM to recall millions of vehicles with Takata air bag inflators

General Motors world headquarters in Detroit, Mich. Photo: Bill Pugliano/Getty Images

The National Highway Traffic Safety Administration announced Monday that General Motors must recall and repair any vehicle equipped with Takata air bag inflators, per AP.

Why it matters: The government agency said GM must recall nearly 6 million pickup trucks and SUVs from the 2007–2014 model years. Despite the automaker's multiple appeals to the NHTSA, this new regulation will cost the company around $1.2 billion.

Updated 11 mins ago - Politics & Policy

House passes George Floyd Justice in Policing Act

Photo: Stephen Maturen via Getty Images

The House voted 219-213 on Wednesday evening to pass a policing bill named for George Floyd, the Black man whose death in Minneapolis last year led to nationwide protests against police brutality and racial injustice.

Why it matters: The legislation overhauls qualified immunity for police officers, bans chokeholds at the federal level, prohibits no-knock warrants in federal drug cases and outlaws racial profiling.

Senate Republicans plan to exact pain before COVID relief vote

Sen. Ron Johnson. Photo: Stefani Reynolds/Bloomberg via Getty Images

Republicans are demanding a full, 600-page bill reading — and painful, multi-hour "vote-a-rama" — as Democrats forge ahead with their plan to pass President Biden's $1.9 trillion COVID-19 relief package.

Why it matters: The procedural war is aimed at forcing Democrats to defend several parts the GOP considers unnecessary and partisan. While the process won't substantially impact the final version of the mammoth bill, it'll provide plenty of ammunition for future campaign messaging.