When General Electric (NYSE: GE) announced last month it would spend $30 billion to reinvent itself ... I never thought it would spend it on cars.
With 30 bills to spend, and two years to spend it in, GE has already laid down $3 billion to challenge Schlumberger (NYSE: SLB) with its Dresser acquisition, spent hundreds of millions more buying credit card debt off of Citigroup (NYSE: C), and promised $432 million in upgrades to its home appliances business. But its latest spending spree is coming to a car lot near you.
Over the weekend, the news broke: GE will soon place "the largest [electric car] order in history," buying tens of thousands of electric buggies from a manufacturer (or manufacturers?) yet to be named. Pre-announcing the purchase, but promising to give further details later this week, CEO Jeffrey Immelt is milking this announcement for all it's worth, building speculation before confirming this week's lucky winner. But who will that winner be?
Likely candidates
Last year, I dug deep into the electric car PR machine and emerged with a list of who's who in electric cars -- a road map to the likely winners and losers in this burgeoning new industry. Topping the list, of course, are General Motors and its Chevy Volt, Nissan and its Leaf, and Ford (NYSE: F) with the electric Focus and electric Transit Connect van. But that's just the beginning. There's also Berkshire Hathaway (NYSE: BRK-B) darling BYD Motors to consider, Mitsubishi and the i-MiEV, Tesla (Nasdaq: TSLA) and the new Model S -- and Fisker, Th!nk, and a host of other, smaller boutique shops.
But the truth is, GE will need to spread its wealth around quite a bit if it wants to acquire all 23,000-odd electric cars on its shopping list. For example, both Tesla and Nissan tell us it will be more than a year before they've ramped capacity to the point where they can put out 20,000 electric cars annually. It's unlikely GE would clear out their entire stock. Rather, GE's true aim is probably contained in the subtext to this weekend's announcement. According to a GE spokesman: "Any boost in EV sales would add to GE's bottom line as it expands its clean-energy technology, including car chargers."
It's in GE's interest, therefore, to see all of these carmakers succeed in going electric. So ... if you're of a mind to gamble on this week's news, the best bet is that "none of the above" will claim GE's entire order. Longer term, though, now that GE is backing their play, they could all come away winners.
