With the 2021 Ford Mustang Mach-E debuting this week, one influential analyst says it’s time for General Motors to follow suit with the Chevy Corvette and create an electric crossover, which would anchor a Corvette sub-brand.
“It’s time to look at the potential of GM’s supercar brand, Corvette,” Morgan Stanley’s Adam Jonas wrote in a note to clients Tuesday. “Historically the thought of GM expanding Corvette into anything beyond its single-model status would have been brand hersey. But times are changing in global autos.”
Jonas says a Corvette sub-brand could be worth $7 to $12 billion. The mid-engine Vette would remain the anchor, but a hypothetical electrified SUV wearing the Corvette badge would also join the portfolio and allow the new brand to sell perhaps 80,000 vehicles per year by the mid-2020s and 100,000 units annually by the end of the decade. Corvette could also add a higher end supercar priced around $150,000 to round out this portfolio. While this might sound audacious, rumors are already picking up over further expansion of the Mustang line. Chevy has sold 14,497 Corvettes this year through the September. The mid-engine C8 starts production in February.
Chevy declined to comment on the Morgan Stanley report. “We appreciate everyone’s excitement about this iconic brand, but we will not engage in the speculation,” a spokesman told Autoblog, echoing GM CEO Mary Barra’s comments during the company’s third-quarter earnings call.
Jonas points to Ferrari, which was spun off from Fiat Chrysler in 2016, as an example of a supercar brand that grew from its niche within FCA to a powerhouse company worth an estimated $30 billion. Such a move would unlock Corvette’s true value within Chevy and GM, where the nameplate is undervalued, he argued. Ferrari is also pursuing plans for an SUV.
“In essence, we think the Corvette brand is undervalued and under-appreciated by the market,” said Jonas, who projects Corvette’s current value as $2 billion.
The Mustang Mach-E is an expansion of the Mustang lineup to include a new body style and electrification, and Ferrari is an independent company that’s publicly traded. The Morgan Stanley analyst’s suggestion for Corvette is in the middle, simply giving it status as its own brand within GM, though Jonas said there’s benefits to a full spin-off with GM retaining some equity.
Electrification would also allow Corvette to achieve higher levels of performance than internal combustion engines allow on their own, while adding an SUV body style would open the brand up to an entirely different consumer set, Jonas noted.