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GE Electric Car Opportunity

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.


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