General Electric plans to purchase 25,000 electric vehicles by 2015, giving the budding Electric Vehicle business a significant boost. Initially, they will purchase 12,000 vehicles from General Motors starting with the Chevrolet Volt, which has just become available to early buyers this month.
General Electric said that it intends to convert at least half of its fleet of 30,000 vehicles but the move into electric vehicles is also geared at boosting demand for its grid equipment and fleet management businesses. General Electric also sells an Electric Vehicle charging point called the WattStation.
“Electric vehicle technology is real and ready for deployment and we are embracing the transformation with partners like GM and our fleet customers,” General Electric CEO Jeff Immelt said in a statement. “By electrifying our own fleet, we will accelerate the adoption curve, drive scale, and move electric vehicles from anticipation to action.”
General Electric expects that broader use of electric vehicles can deliver another $500 million in the near term to the company. Its fleet management business provides services to fleet operators, such as financing, maintenance and fuel-economy services. By using a large number of electric vehicles for sales people, GE can prove out that the technology is viable, which will help build demand for electric vehicles and equipment with its fleet customers, said Oliver Hazimeh, an auto analyst and the Global E-Mobility practice at management consulting company PRTM.
“When GM is talking to their lease customers and trying to convince them to go greener, if they can’t prove it themselves, it’s hard to win that argument,” he said. “They are trying to take a leadership role.” For General Motors, it represents a giant order for a car that is just starting to come off the assembly line. Although the company has received a lot of attention for the Volt, many people consider its $41,000 price tag relatively steep for consumers. The Volt is driven by an electric motor and has a gas tank which runs a generator to charge the batteries for rides over about 40 miles.
The Volt and the all-electric Nissan Leaf are proving to be popular with consumers eager to get access to new technology. But fleet operators have long been considered a key to making electric vehicle use more widespread. Fleet owners typically consider the total cost of ownership over several years when buying vehicles, rather than only the purchase price, and fleet drivers typically have repeated routes.