Wall Street warms to Detroit’s EV vision

DETROIT — Detroit's vision for how it can compete against Silicon Valley is starting to come into focus — and Wall Street finally may be taking notice.

General Motors last week revealed plans to launch 20 new electric or fuel cell vehicles by 2023 as part of CEO Mary Barra's push toward an autonomous, zero-emission future. Ford Motor Co. CEO Jim Hackett, meanwhile, spelled out drastic cost-cutting measures to improve the automaker's ability to compete now and in an uncertain future for the industry.

The moves were meant to reassure skeptical investors who have kept both companies' stock prices in neutral, instead favoring the disruptive business models and new-age technology of Tesla and Google.

They might have worked.

GM's shares hit a new high every day last week as bullish analysts upgraded its stock, and there is growing speculation that GM could spin off its mobility business into a separate company. Ford received a small bump before its stock price leveled off, and several analysts issued reports saying the Blue Oval has the right building blocks in place for success, though it may take some time.

"At this point in the cycle [both in the U.S. and globally], it is extremely difficult to sustainably push earnings expectations to new highs," Morgan Stanley analyst Adam Jonas said in a note to investors last week. "We are not surprised to see auto firms spend greater portions of their presentations focused on a thoughtful pivot to Auto 2.0."

That pivot — for both Ford and GM — includes moving away from the traditional internal combustion engine to zero-emission propulsion systems.

"General Motors believes the future is all-electric. A world free of automotive emissions," product chief Mark Reuss said last week. "These aren't just words in a war of press releases. We are far along in our plan to lead the way to that future world."

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