The atmosphere at this year’s Detroit Auto Show is electric — I mean literally electric, as the world’s biggest automakers are betting that electric vehicles will boost their high-tech profiles and, hopefully, their bottom lines. 

Perhaps the biggest buzz at the world’s largest and most important auto show is being made by Ford (NYSE:F) and the new electric version of its wildly popular Focus.  The Ford electric vehicle is designed to keep pace with General Motors’ (NYSE:GM) highly acclaimed Chevrolet Volt, which just took honors as the North American Car of the Year.  The Volt also has captured the prestigious Motor Trend Car of the Year award, and Automobile Magazine’s Car of the Year.

While industry press awards are nice feathers in the caps of the automakers, the real test of whether new electric cars can help boost carmakers’ profits won’t be determined until after the fact.  Chevy has just started selling the Volt, and the electric Ford Focus won’t go on sale until the end of the year.  Yet already, the optimism surrounding the auto industry is at a higher level than it’s been in a very long time — and that’s at least partly due to the electric-car buzz. 

Although Ford and GM have captured the imagination of auto sectors observers with the Focus and Volt, we can’t ignore Nissan’s Leaf or Toyota’s (NYSE:TM) groundbreaking and still very popular Prius hybrid.  Then there’s ultra-hip boutique electric-car maker Tesla Motors (NASDAQ:TSLA), which went public last July and created a lot of buzz as the first new U.S. automaker to go public since Ford did so back in 1956.  The remaining member of “The Big Three” U.S. automakers, Chrysler, also has plans to go public in 2011, although they have no announced plans for a new electric vehicle.

The sense of exuberance on the part of industry insiders may indeed be encouraging; however, keep in mind that sales trends for existing hybrids and electric vehicles are moving in the wrong direction.  According to the website Hybridcars.com, hybrid car sales fell for the third consecutive year in 2010, sinking nearly 6%.  That’s not good at all, but it’s especially not good in a year when overall vehicle sales jumped by 11%.

When you look at sales of all-electric vehicles, those numbers are a mere pittance.  GM sold just 326 Chevy Volts in 2010, although the model only came to market in December.  Nissan only sold 18 of its Leafs.  Tesla recently announced that it has delivered more than 1,500 Roadsters worldwide in at least 30 countries, but these numbers still represent just a miniscule fraction of the massive auto industry. 

Interestingly, in 2010 consumers actually showed a renewed willingness to buy larger vehicles such as pickup trucks and SUVs.  According to industry analysts at Edmunds.com, truck sales for 2010 are expected to have grown nearly 15% from 2009, while SUV sales are expected to be up over 21%.  Still, it’s not the big trucks and SUVs grabbing all of the attention at the Detroit Auto Show.  For that we need to look at the electric vehicle offerings from Ford and GM. 

On Wall Street, it’s often said that perception and excitement around a company’s new offering are more important than their actual bread-and-butter products.  That’s perhaps why those newfangled electric vehicles are creating such an upbeat mood at the Detroit Auto Show.  But what’s also caused a big splash in the industry is Ford’s recent announcement that they plan to hire 7,000 new workers this year.  This bullish development, as well as the decidedly upbeat mood precipitated in large part by those new electric vehicles, definitely is cause for auto industry optimism. 

It’s also good reason for investors to steer a bullish eye on auto stocks in 2011.

At the time of publication, Jim Woods held no positions in the stocks mentioned in this article.