On November 11, 2010, Bloomberg reported that General Electric Co. plans to buy 25,000 electric vehicles (EVs). Nearly half of the clean energy automobiles will be from General Motors Co., by 2015. This would be the largest such order ever, to date.

The buy would account for more than half of GE’s 30,000-car fleet and includes vehicles customers may lease from its GE Capital unit, GE said in a statement. GM’s share of the order is 12,000 electric vehicles, including the 2011 Chevrolet Volt. Financial terms were not disclosed.

Photo of a Chevy Volt EV

GE Chief Executive Officer Jeffrey Immelt hopes to position the Fairfield, Connecticut-based corporation to benefit from more energy- efficient technologies in the clean energy automobiles industry. To that end, GE produces batteries, car-charging stations and smart-grid systems. GE claims it is in a “strong position” to help 65,000 leasing customers switch to electric automobiles and forecasts that the electric-car market will grow around $500 million in sales in the next three years.

“Wide-scale adoption of electric vehicles will also drive clean-energy innovation, strengthen energy security and deliver economic value,” Mr. Immelt said in the statement. One-third of the world’s electricity is generated by GE’s power-plant equipment, and the need for stations to charge electric vehicles would spur demand for increased power from its utility customers.

Sale of GM Shares

GE’s order is a much-needed shot-in-the-arm for the Volt as the Detroit-based car-maker readies itself for an initial public offering following its widely publicized and political restructuring and bankruptcy in 2009. The deal is intended to help both companies, said Jim Hall, principal of the vehicle consulting firm 2953 Analytics in Birmingham, Michigan.

“Fleet sales will always help; it might also get other companies interested,” Hall told Bloomberg. “Any co-marketing with a large company has potential.”

On the day of the announcement, GE shares fell 20 cents, or 1.2 percent, to $16.35 at 4:15 p.m. in New York Stock Exchange composite trading. The shares gained 8.1 percent this year, through November 11.

During in a speech in London last month, Mr. Immelt told the audience that he planned to order “tens of thousands” of clean energy electric vehicles in an effort to promote increased private spending on renewable-energy investments.

The GE CEO is increasing research and development by 18 percent this year at the company. Furthermore, they are spending $20 billion on clean energy R&D in 2011 and 2012. GE, which showed-off its WattStation plug-in charging system in July, 2010, plans to declare winners of its $200 million SmartGrid contest later this month.

Mr. Hall said that GE wants “to own a big chunk of the vehicle-charging business”.

Oil and Emissions

Meanwhile, U.S. President Barack Obama’s administration has already committed more than $11 billion in tax money to help car and battery makers start manufacturing electric vehicles.

“Electric vehicles are a real-world technology that can reduce both emissions and our dependence on oil,” said GM CEO Dan Akerson in the GE statement.

GM intends to deliver Chevy Volts to retail customers by the end of 2010, he said. The sedan comes with electric motor to drive the wheels. A gasoline engine recharges the batteries once their power is depleted.

Other car-makers planning to sell battery-powered vehicles in the next 18 months include Nissan Motor Co., starting with Leaf hatchbacks in late 2010; Ford Motor Co., making electric versions of its Transit Connect commercial delivery van and the Focus compact car; Toyota Motor Corp., which plans to sell a rechargeable RAV4 sport-utility vehicle (SUV); and Renault, with its commercial delivery and transit mini-truck, the Kangoo.

In purchasing so many vehicles, GE will help drive down prices of the available EVs, and that should spur production and increase demand for battery plants and additional parts-makers, said Fred Smith, CEO of FedEx Corp. and Chairman of the Electrification Coalition, a Washington-based organization of transportation and energy executives, in the statement.

“Make Electric Vehicles More Visible”

This deal will “make electric vehicles more visible and acceptable to the public at large,” said Mr. Smith. “This is good for GE, good for our economy and good for our nation.”

GE plans to open and maintain two customer centers to evaluate electric vehicle-charging, maintenance requirements and driver experience. They also plan to display an array of models and manufacturers in these centers. According to the statement, there will be one near Detroit, in Van Buren Township, Michigan, which is home to a new technology center GE announced last year. The second will be in Eden Prairie, Minnesota, home of GE Capital Fleet Services.

GE is investing $10 billion over the next five years in clean energy throughout its business vertices. GE produces lithium-ion batteries for cars and trucks in a venture with A123 Systems Inc. and sodium-based batteries for use in locomotives and other large vehicles.

GE Energy Infrastructure is the company’s largest industrial unit, responsible for $37 billion of the parent company’s $157 billion in revenue in 2009. GE is also the world’s largest maker of locomotives, medical-imaging equipment, jet engines, and related information technology systems, as well as the owner of mass media, including NBC Networks.

GE was a major funds contributor to the Obama campaign for President in 2008, and Mr. Immelt has been a close advisor to Mr. Obama during his campaign and in his first term as President.