GE To Buy 25,000 Electric Vehicles By 2015
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NEW YORK — With a name like General Electric, it stands to reason GE would want to embrace the electric car.
Thursday the company announced plans to embrace 25,000 of them by 2015.
GE's chief executive, Jeffrey Immelt, said the company would convert half of its corporate fleet to electric vehicles by 2015 in an effort to give the nascent technology a jump start and help develop a potentially big new market for the company.
"By electrifying our own fleet, we will accelerate the adoption curve, drive scale, and move electric vehicles from anticipation to action," Immelt said in a statement Thursday. The company had hinted at the plan in late September.
GE builds natural gas-fired generators for utilities, electric motors, advanced electric meters and a home electric car charging station called the WattStation, all of which could be in higher demand if drivers buy electric cars.
GE estimates the expanding market could bring it up to $500 million in revenue over the next three years.
The first mass-market electric cars are expected to go on sale next month, including the Chevy Volt and the Nissan Leaf.
GE said it will buy 12,000 GM vehicles starting next year, beginning with the Volt. It plans to add others as manufacturers expand their electric car offerings. Every major automaker has plans to introduce cars that can be powered by electricity over the next two years.
Electric cars are cheaper to fuel and operate than gasoline powered cars, but they are about twice as expensive to buy, mainly because of the high cost of batteries. The battery that powers the $33,000 Nissan Leaf costs about $12,000, nearly the price of a gasoline-powered car the Leaf's size.
Carmakers hope to be able to sharply reduce the cost of the batteries over time, but in order to do so they need to sell more electric cars.
That's where GE comes in. GE is hoping that its planned purchase will help drive down costs by increasing production volumes and assuring carmakers that they will have at least one big buyer.
Electric utilities, which would also benefit from the adoption of electric cars, are also expected to buy thousands of vehicles.
Federal and local governments are also helping. Washington is offering $7,500 tax credits to electric car buyers to help make the cars more affordable and some states and cities offer additional subsidies that can reach $8,000.
Still, only 30,000 electric vehicles are expected to be sold next year, out of a projected 13 million new cars. J.D. Power and Associates predicts that by 2020 that number will grow to 275,000, still only about 2 percent of total car sales.
General Electric is based in Fairfield, Connecticut. General Motors Co. is based in Detroit.
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JONATHAN FAHEY and SAMANTHA BOMKAMP 11/11/10 02:36 PM ET Associated Press