GE Will Purchase 25,000 Plug-ins, 12,000 Chevy Volts

· · 10 years ago

General Electric confirmed yesterday that it will purchase 25,000 electric vehicles over the next few years, after CEO Jeffery Immelt made an informal statement to that effect late last month. GE will replace at least half of its 30,000-strong vehicle fleet with plug-ins, with the remainder of the cars going to customers of its fleet management business. GE says 12,000 of the cars will be the Chevy Volt.

GE says that it plans to save money on energy costs as a result of the move, but it also hopes to help stimulate interest and sales of electric cars, which it hopes to capitalize off of in a major way. The company said it believes its technologies, components and accessories could one day combine to capture as much as 10 percent of the plug-in vehicle industry's total revenue.

Likewise, fleets are proving to be an increasingly promising avenue of growth for electric vehicle makers. In addition to GE's unprecedented announcement, FedEx, Best Buy, Frito-Lay, and PG&E, and may others, are also exploring or making moves toward electrifying their fleets.

One reason that corporate sales could be such a boon to early plug-in carmakers is that corporations have more leverage in making purchases for the long term. If the numbers are right, paying a little extra for a car that will save money on fuel costs is good for the bottom line regardless of the additional upfront cost. Fleet vehicles also tend to be used more than consumer cars—meaning that any potential payback will be quicker.

Washington's leading electric vehicle lobbying and advocacy group, the Electrification Coalition (EC), is currently working to lay the groundwork for federal initiatives which would encourage other businesses and corporations to join GE (which is an member of the EC) in plugging in their fleets. Oliver Hazimeh of PRTM—a consulting firm that works with the EC—says that fleet purchases could generate more than 20 percent of lithium ion battery sales for electric vehicles. In a statement, Hazimeh said that GE's purchase would “likely serve as the catalyst for other fleets,” serving to “accelerate the scale-driven cost reductions in advanced batteries.”

Next week, the EC will release its Fleet Electrification Roadmap, a sequel to last year's Electrification Roadmap, which would later become the inspiration for the Promoting Electric Vehicles Act of 2010 (though that legislation was put on hold after its central elements were folded into the failed energy bill this summer.) The group is hoping that the momentum from GE's announcement could help to stimulate the appetite for fleet incentives in Washington—though in an anti-spending political climate, both bills could face an uphill battle.

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