November 12, 2010, WSJ, Purchases, Through 2015, Will Convert Much of Company's Fleet to Green Cars
Reuters
GE says it will buy 12,000 Chevrolet Volts, a model of which is shown above, as part of a move to boost the electric-car market.
General Electric Co. said it will buy 25,000 electric vehicles by 2015 to use in its fleets and those of its fleet-services business, converting at least half of one of the world's biggest vehicle fleets to mostly electric.
The company will initially buy 12,000 Chevrolet Volts, made by General Motors Co., starting in 2011. GE said it will then add other electric vehicles to its fleet as other car makers expand their offerings. The company said it is in a "strong position to help its 65,000 global fleet customers convert and manage their fleets."
GE plans to buy 1,000 Volts next year and 2,000 to 3,000 per year after that through 2015, GM said. The purchases will comprise a significant portion of GM's early Volt production. The car maker has said it plans to build 10,000 Volts in 2011.
A GM spokesman declined to say if the company now intends to build more Volts, but signaled that may be the case. The GE purchase "won't reduce the number of Volts available to the public," he said.
GM has said it will start delivering the Volt to retail customers by year's end. It is designed to travel 25 to 50 miles on an initial charge before a gasoline-powered generator kicks in and makes electricity to drive the wheels. The car has a total range of about 300 miles.
GE's announcement leaves room for the conglomerate to buy the 100-mile-range Leaf electric car from Nissan Motor Co. as well as the Ford Motor Co. Focus electric expected in 2011 and Toyota Motor Corp.'s RAV4 electric, due in 2012.
GE's plan would be the largest purchase of electric vehicles in North America so far as the Fairfield, Conn., company seeks to jump-start an industry from which it could benefit. EVs are a growing interest for GE, which is trying to shrink its finance division to 30% of its profit and expand its industrial divisions, particularly in clean technologies.
The company has said it will invest $10 billion in the next five years in products such as wind turbines, vehicle batteries and electricity-grid technology.
GE's purchase could help car makers such as Nissan, Ford and GM more quickly attain the higher volumes needed to lower the cost of producing electric cars—a linchpin in wider adoption of the technology, said Sam Ori, director of policy for the Electrification Coalition, an organization of companies that is promoting electric vehicles.
Nissan has the capacity to build 50,000 Leafs in each of the next two years. That will rise to 150,000 in 2013 when a new plant is finished in Tennessee. All of the other companies making electric vehicles are pegging much lower production volumes.
Other U.S. fleet owners have made smaller commitments. Enterprise Rent-A-Car plans to buy 500 Leafs and 100 electric cars from Coda Automotive Inc. Frito-Lay said it will buy 176 Smith Electric Vehicles delivery trucks. Johnson Controls Inc., which makes electric-car batteries, plans to buy 20 electric Fords.
But GE's purchase is dwarfed by the commitment of start-up Better Place—a partner of GE—to buy 100,000 of Renault SA's Fluence Ze electric cars for Israel and Denmark. Better Place plans to do battery swapping for drivers who have expended their charge.
GE, which makes 30% of the world's power-generation equipment, estimates it could make 10 cents for every $1 of electric vehicles sold. To further that it has made a number of investments and launched partnerships with companies backing electric cars.
GE plans to work with Better Place to develop standards, finance batteries and help fleet- electrification programs. It has a 10% stake in U.S.-based lithium-ion battery maker A123Systems Inc. after investing $70 million.
The company has said it would build, with government assistance, a $100 million plant near Albany, N.Y., to make batteries for hybrid locomotives and for use in boats, mining trucks and cars. GE is also investing $100 million to build a research and manufacturing facility outside Detroit to focus on things like wind turbines and electric- vehicle technology.
—Sharon Terlep and Nathan Becker contributed to this article.
Write to Paul Glader at paul.glader@wsj.com and Michael Ramsey at michael.ramsey@wsj.com
Link: http://online.wsj.com/article/SB10001424052748703848204575608323321329514.html
