GE backs off plan for 25,000 EVs, plug-in hybrids
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General Electric's commitment to buy 25,000 electric vehicles and plug-in hybrids, promoted as the largest such purchase ever when it was announced more than two years ago, is shifting to include other types of alternate-fuel vehicles.
The reason: Customers of GE's corporate fleet-services unit wanted more options, said Deb Frodl, the division's chief strategy officer. So GE has included natural-gas-powered pickups and propane-fueled vehicles among about 11,000 autos already acquired from Ford Motor Co., General Motors and other carmakers.
The shift at GE, whose 2010 pledge was hailed as a catalyst for bulk buying of electric vehicles, shows how businesses are struggling to balance greater fuel efficiency and reduced emissions against higher sticker prices, limited range and lingering doubts about still-infant technology.
"Many companies say they want to think about what their reliance on oil is, but there's a disconnect we've been tracking for a couple of years now" between CEOs' goals and their purchasing managers' decisions, said Scott Sarazen, of Ernst & Young.
GE is a large purchaser of fleet vehicles -- it owns 30,000 for its own employees and manages about 1.4 million for lease customers -- and its very name and place in U.S. history made its electric-autos promise notable. The plan's new scope underscores the competition EVs face from other alternative-fuel cars and vehicles with traditional gasoline engines.
Volt selection
GE said in November 2010 that the Chevrolet Volt would be among 12,000 GM electric vehicles bought by 2015. To meet that target, GM will have to offer new models in coming years, Frodl said in an interview. The Volt's battery fire days after a crash test wasn't behind the decision to widen GE's approach to include more alternative-fuel autos, Frodl said.
"It's the demand of our customers," she said. "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."
CEO Jeffrey Immelt unveiled GE's car-buying plans, with the Volt the only model cited by name, at about the same time the car reached consumers. The wheels on the world's first so-called extended-range hybrid are turned by an electric motor that gets current from a battery that can be recharged at an outlet or on- the-go with a generator running off a gasoline engine.
Diversifying GE's program with vehicles burning natural gas makes sense with the price of that fuel down 76 percent from the high of July 2008, Ernst & Young's Sarazen said.
"You can't have this conversation without talking about the economics of natural gas," he said. "Compared to a battery pack when the fuel is this cheap, it definitely impacts choices."
Charging stations
GE is testing 300 Ford F-250 medium-duty pickups that use compressed natural gas, Frodl said. It's also buying 2,000 of the automaker's plug-in C-Max Energi wagon, to complement the 3,000 Volts it has ordered. GE has acquired an additional 6,000 autos, mostly plug-in hybrids and electric vehicles, for leasing customers, spokeswoman Lindsay Lorraine wrote in an e-mail.
Ford agreed to market GE's electric-car charging stations and natural gas fueling infrastructure to commercial customers as part of the agreement, according to a Nov. 20 GE statement. GE signed a two-year research agreement with Nissan to study integrating electric vehicles into the power grid and their impact on energy demand.
GE envisions its 25,000 electric and alternative-fuel vehicles flowing through two channels: 10,000 would be spread among its 65,000 fleet customers, and the rest would go to help the company replace half its of its own 30,000 corporate vehicles.
GE employees driving its fleet vehicles average about 100 miles a day, said Frodl. While that's within the reach of the Volt and C-Max, it's beyond the range of the Leaf, which the EPA says averages 73 miles on a charge.
The Volt's range is 380 miles, including 38 miles in electric-only mode, while the C-Max averages 620 miles, with 21 miles in electric mode, according to the EPA.
Most of GE's C-Maxes will be deployed in its fleet by February, Frodl said. GE is conducting pilot programs with about 20 of its fleet-services customers testing handfuls of Volts, including utility companies, food and beverage producers and pharmaceutical firms, Frodl said.
A "vehicle innovation center" in Minneapolis serves as a hub for demonstrating the vehicles for potential users, she said.
"We're delighted now that more automotive manufacturers come to market with new products for us to deploy," Frodl said. "We've always globally multisourced the fleet. It was never the intention to be with just one automotive manufacturer."
-- Bloomberg
