Why is General Electric Backing Down from its Plug-in Pledge?

By · January 10, 2013

Immelt

General Electric CEO Jeffrey Immelt

In 2010, General Electric CEO Jeffrey Immelt pledged that his company would purchase 25,000 plug-in vehicles by 2015. The announcement was seen as a major coup for electric vehicle adoption in the United States. Not only was it a record order for electric vehicles, but given GE’s status as one of the world’s largest private fleet operators, its commitment to switch half of its 45,000-member sales staff to plug-in vehicles stood as a major vote of confidence in the technology.

This week though, GE pulled back somewhat from that promise. While it still plans to purchase 25,000 alternative-fuel vehicles by 2015, at least some of those vehicles will now be natural gas- or propane-powered trucks. As in its 2010 announcement, GE didn’t provide much in the way of further detail., simply telling AutoNews:

“It’s the demand of our customers," said Deb Frodl, GE's corporate fleet officer. “There are so many technologies out there and our customers need a variety of technologies in their fleet today, not just one. We’re not picking winners and losers.”

So far, GE has ordered 3,000 Chevy Volts and 2,000 Ford C-Max Energi plug-ins for its corporate fleet in addition to 6,000 “mostly plug-in hybrid and electric” alternative-fuel vehicles for its fleet services division, which leases a total of 65,000 vehicles to other businesses. The company is currently testing 300 Ford F-250 pickups and hasn’t announced exactly how many of the initial 25,000 plug-in vehicle purchases will be replaced by other technologies.

What Does it Mean?

While GE’s recent announcement may provide critics of plug-ins with another opportunity to crow about how the technology has become a disappointment to even its biggest supporters, the real takeaway from this piece of news is a far more fundamental lesson in public relations: don’t promise what you can’t deliver. Behind GE’s all-to-familiar lines about customer demand and “winners and losers” lies a truth that should be far more embarrassing to Jeffrey Immelt than to the EV market.

Back in 2010, GE was engaged in a full-fledged promotion of its greener side, promising a $10 billion total investment in clean energy technology across its many businesses. The company was also about to unveil its WattStation charger, which it coupled with a promise to invest $200 million in a smart grid capital venture fund.

At some point in GE’s massive corporate reinvention, somebody forgot to confirm that it would be possible to incorporate 12,000 Chevy Volts and 13,000 other plug-ins into the company's existing operations. Though GE now says it would need to have more plug-in models to choose from in order to meet its pledge, there was never any indication back in 2010 that those vehicles would be here two years later.

Plug-in vehicle sales tripled last year to roughly 53,000 units, showing that if anything, demand from consumers has been building since Immelt's announcement. It appears the forward movement of the EV market will continue, regardless of GE's estimation of much demand there is from its fleet customers and sales staff.

Comments

· · 1 year ago

"Though GE now says it would need to have more plug-in models to choose from in order to meet its pledge, there was never any indication back in 2010 that those vehicles would be here two years later."

I'm not sure that's entirely fair. There was a lot of talk about upcoming EVs in 2010, much of which has been dialed back in the face of tepid sales of every EV but the Volt (which itself is still well below GM's optimistic targets). GE isn't going to have nearly the range of choices this year and next that they'd good reason to expect back then. Low vehicle sales also cast a pall over any hope of building out charging infrastructure, which certainly affects service & sales fleets more than it does commuters charging overnight in their garages at home.

While I don't consider this announcement anything like a death knell for EVs, it does give one pause, suggesting that we need to dial back our expectations over the next few years. The Volt, Leaf, and i-MiEV are available nearly everywhere now, at prices (after tax credits) near or below the average $30k selling price for new cars in 2013. If they're not moving many units, I'm not sure what's going to happen in the next year or two that would radically alter that for these cars or whatever similar offerings we may see in that time frame.

· · 1 year ago

I sure hope someone at Plugincars.com is watching WSU's tin anode breakthrough that is claimed to TRIPLE Li ion batteries' energy capacity and be on the market BEFORE June of THIS year (i.e, within 6 months).

Link to press release here:
http://news.wsu.edu/pages/publications.asp?Action=Detail&PublicationID=3...

Since we're past the half-way market between that press release and when they said ti would be available, this would be a good time for someone from Plugincars to contact Prof. Norton and get an update. His contact info is at the bottom of the press release.

· · 1 year ago

General Electric Should buy more EV's. After all, We American Taxpayers foot bill for its negative 45 % income tax rate. Its supposed to be Plus 35 % and the Corporate Income Tax is Constitutional, unlike the other one.

When you are talking $Billions in Corporate Welfare, it would be nice if GE 'Wasted' some money on its EV's. Maybe they'd get the Gov't to buy more DuraStations for them..

· · 1 year ago

@Howland,

"When you are talking $Billions in Corporate Welfare, it would be nice if GE 'Wasted' some money on its EV's. Maybe they'd get the Gov't to buy more DuraStations for them.."

I don't think the stockholders would agree that GE should be wasting any money.

· · 1 year ago

Obama promised in his first campaign that half of all federal fleet purchases would be plug-in cars. In 2011, only 456 out of 54,999 vehicles purchased were plug-in cars.

· · 1 year ago

@Michael

Please re-read my post. I"m PAYING GE already in my income taxes. They don't have to be afraid of wasting money on EV's since they have a sweet heart deal in this corporate welfare. GE is essentially a hedge fund these days, they've just shut down their last bulb plant in the US. Soon, GE won't make anything at all in the US, just have their nameplate put on everything.

Would I really prefer GE stop purchasing EV's and stop getting $billions of our money? If one was a condition for the other, then Most assuredly.

Seeing as they are trying to cut Food Stamps again, ask a poor person the same question and see what they think? They'd probably say "no cuts to the food stamp program and pay for it by taking the money from what you would otherwise give to GE".

· · 1 year ago

GE probably manufacturing some Chevy Volt components. Why not to invest close to your mouth.

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