GM's Latest Bright Idea

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Is General Motors serious about electric cars? It sure looks like it.

Believers in the Electric Vehicle Revolution cheered this week's news that, as it prepares to begin selling its Chevrolet Volt electric car to consumers, GM is also investing in Hoosier startup Bright Automotive. The companies aim to bring a plug-in gas/electric hybrid van to market in 2013. A van that, like the Volt, runs on batteries first (for 38 miles), then switches to a gasoline engine to generate juice for an additional 360 miles. A van that could, incidentally, blast Ford's (NYSE: F  ) new electric Transit Connect van right outta the marketplace -- seeing as the TC's all-electric engine has only an 80-mile range.

So hurray for GM. In tandem with its development of an electric car "for the masses," it's now also targeting the market for electric delivery vans. But don't go storming the barricades just yet.

PC or PR?
Sure, at first glance this looks like absolutely the (b)right idea. (Incidentally, that's the name GM and Bright have chosen for their truck: the "Bright IDEA.") I shudder to think how much gas gets wasted every day by delivery vans idling at the curb as their drivers dash to the door to drop off packages. Recouping those costs by buying vans you can turn off and on at the touch of a button has to sound like a no-brainer to the accountants at FedEx (NYSE: FDX  ) and UPS (NYSE: UPS  ) .

Indeed, we know both companies are already investing in the concept. We also know that companies ranging from battery makers like A123 (Nasdaq: AONE  ) and Ener1 (NYSE: HEV  ) to automakers like Toyota (NYSE: TM  ) and Tesla (Nasdaq: TSLA  ) are placing big bets on electric vehicles becoming the wave of the future. So on the one hand, GM has fiscal rectitude on its side. On the other hand, it's most definitely "politically correct."

But what about the third hand? As big as this idea is, I can't help but notice that the size of GM's investment in Bright is exceedingly tiny: just $5 million. That's less than what GM would pay for a minute's worth of commercial airtime during the Super Bowl. For a company that hit up U.S. investors for tens of billions of dollars, $5 million isn't an "investment" in electric vehicles. It's chump change.

Then again, maybe that's GM's brightest idea yet. At this price, it doesn't matter whether the new van succeeds or not. GM's bought itself some good PR, at a very good price.

Ford Motor and FedEx are Motley Fool Stock Advisor recommendations and United Parcel Service is a Motley Fool Income Investor selection. Fool contributor Rich Smith has no position in any stocks named above. The Motley Fool has a disclosure policy.

Read/Post Comments (7) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 05, 2010, at 7:42 PM, liveoilfree wrote:

    Idiot. You don't have to "turn off" an EV when waiting at the curb (or stopped in traffic); it uses essentially no energy when stopped. Most delivery vans follow a route, and still sit idle more than 16 hours per day. It's a lie to think that EVs need a quick charge; while sitting idle overnight, they can get a slow charge.

  • Report this Comment On August 05, 2010, at 8:42 PM, baldheadeddork wrote:

    And I'm going to smack Rich from the other side.

    Delivery trucks are huge targets for theft. You never leave the keys in them while you're away from the vehicle, and you damn well never, ever leave it with the engine running.

  • Report this Comment On August 05, 2010, at 9:58 PM, cammbamm wrote:

    I am a UPS driver and if I left the keys in the ignition; let alone the truck running; this is grounds for immediate termination with very little chance of the union getting your job back. If you are caught with your seat belt off even if only going 3 houses down; termination.

  • Report this Comment On August 05, 2010, at 11:03 PM, BobMichigan wrote:

    Hey pinhead, $5 mill buys a stake in the company, they are also providing engines and transmissions, that is the real investment.

  • Report this Comment On August 06, 2010, at 8:29 AM, GeoMetric wrote:

    Ladies and Gentlemen, the electric revolution is here. I thought second generation biofuels might last until the EV technology progresses, but it seems the auto industry has set the rules, more EV's. Here are my picks already making a killing:

    AMEL.OB 0.68 0.00 0.00%

    SQM 40.31 0.00 0.00%

    JCI 29.60 0.00 0.00%

    VLNC 0.85 0.00 0.00%

    ABAT 3.53 0.00 0.00%

    AONE 10.91 0.00 0.00%

    HEV 3.35 0.00 0.00%

    PPO 26.89 0.00 0.00%


  • Report this Comment On August 06, 2010, at 1:14 PM, TMFDitty wrote:

    Actually, you're right. I'm looking out the window right now at a UPS truck. Driver stops, turns off, makes his dash, returns, turns on, and drives around the corner. I stand corrected.


  • Report this Comment On August 13, 2010, at 1:24 PM, TMFDitty wrote:

    And now I take back my take-back. FedEx just pulled up, left the truck running, came to get my signature for a delivery, returned to truck (still running), grabbed package and brought it to the front door, returned to truck (still, still running), and finally left. That's a good five minutes of idle time right there.


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