GM's electric vehicle business could be worth big money
19 August 2020
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.
Transcripts show George Floyd told police "I can't breathe" over 20 times
Section2Newly released transcripts of bodycam footage from the Minneapolis Police Department show that George Floyd told officers he could not breathe more than 20 times in the moments leading up to his death.
Why it matters: Floyd's killing sparked a national wave of Black Lives Matter protests and an ongoing reckoning over systemic racism in the United States. The transcripts "offer one the most thorough and dramatic accounts" before Floyd's death, The New York Times writes.
The state of play: The transcripts were released as former officer Thomas Lane seeks to have the charges that he aided in Floyd's death thrown out in court, per the Times. He is one of four officers who have been charged.
- The filings also include a 60-page transcript of an interview with Lane. He said he "felt maybe that something was going on" when asked if he believed that Floyd was having a medical emergency at the time.
What the transcripts say:
- Floyd told the officers he was claustrophobic as they tried to get him into the squad car.
- The transcripts also show Floyd saying, "Momma, I love you. Tell my kids I love them. I'm dead."
- Former officer Derek Chauvin, who had his knee on Floyd's neck for over eight minutes, told Floyd, "Then stop talking, stop yelling, it takes a heck of a lot of oxygen to talk."
Read the transcripts via DocumentCloud.