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.

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