By Jeff Siegel
It was a little over a year ago when we first got the news.
One of my “guys on the ground” shot me a quick email about it. And by the time I finished reading it, the story was all over the Internet.
Jeffrey Immelt, CEO of GE (NYSE: GE), had single-handedly changed the demand dynamic on electric cars when he announced the billion-dollar behemoth had put in an order for 12,000 Chevy Volts — and was planning to equip GE fleets with 25,000 electric cars.
Today, new electric cars are finally rolling onto GE parking lots. And according to an internal memo, GE management is really pushing this electric vehicle (EV) program.
In fact, if new GE drivers opt out of the electric vehicle fleet program and use a personal car, GE won't reimburse expenses.
They will, however, allow employees taking part in the program to expense both charging station costs and the Volt-recharging portion of their monthly electric bills.
Also noted in the memo: Every sedan ordered this year will be a Chevy Volt.
So why is GE so hell-bent on pushing electric cars for their employees?
Well, one reason is that by using electric cars, GE will simply save money.
No matter how you slice it, electric car fleets do pencil out to be economically superior to vehicles that rely on gasoline or diesel. Fact is, the running costs on plug-in cars are one-fifth to one-third those of gasoline.
No wonder half of GE's 45,000 salespeople will soon be driving electric cars!
But there's something bigger at play here...
Something that investors should pay close attention to.
$4.3 Billion Up for Grabs
Last year, GE spearheaded a national road tour to encourage businesses to adopt electric vehicles. The company was joined by GM (NYSE: GM), Ford (NYSE: F), Toyota (NYSE: TM), Mitsubishi, Coda, Navistar (NYSE: NAV), and Smith Electric Vehicles (which, by the way, actually has an IPO in the works right now).
But why would GE, which doesn't even make electric cars, lead a pack of automakers on such a tour?
Because GE's got some serious skin in the EV game, that's why.
Although GE does not make electric vehicles, it does make electric vehicle charging stations. And unlike today's standard plug-in charging systems that take about 12 hours to charge a vehicle, GE's WattStation can do it in as few as four.
GE's been very busy over the past few years cultivating relationships with car manufacturers and battery suppliers. The company is one of the largest shareholders of battery maker A123 Systems (NASDAQ: AONE), and last year, they did a deal with Nissan to explore new ways to promote the widespread adoption of electric cars...
GE has also inked deals with EV company Better Place, which will allow GE charging stations to be compatible with Better Place's EV infrastructure.
And of course, there's that massive Chevy Volt order.
No, this isn't some random last-minute attempt to make a few bucks off the burgeoning electric vehicle market...
This is a well-calculated plan — devised years ago — to get a big piece of the pie.
And why not? This is a booming market.
According to the folks over at Pike Research, in less than five years, more than 1.5 million charging locations will be available in the United States, with a total of 7.7 million worldwide. Pike notes that this will translate into revenues of more than $4.3 billion for makers of electric vehicle charging equipment in just five years. That's up from only $400 million in 2011.
Don't think for a second GE's sitting this one out!
More Money for Us
Of course, when it comes to fleets, I still maintain that the future of heavy truck and bus fleets will primarily be powered by natural gas.
But if you're a regular reader of these pages, you already know this. I've been telling this growth story for years — and I'll continue to tell it, because there's a boatload of money to be made here. Now that Obama has sounded off about supporting the development of natural gas refueling infrastructure and tax incentives for fleet conversions, everybody's jumping on this bandwagon...
But that's OK. It just means more money for us.
Because while momentum continues to build for natural gas bus and truck fleets, we continue to load up on those domestic natural gas operations up in North Dakota...
Bottom line: The future of fleets will not be dominated by gasoline and diesel. Most cars will end up being powered by electrons, and buses and trucks will be powered by natural gas.
It ain't rocket science, folks. The writing is on the wall, and the gains are yours for the taking.
It's easy money!