Jeff Immelt: Here’s the Future of Electric Cars
Electric cars are more than just a novel flash in the pan, according to General Electric (NYSE:GE) Chief Executive Jeff Immelt. At an automotive conference in Detroit Tuesday, Immelt highlighted his company’s long-term commitment to the development of alternative-fuel vehicles.
Immelt said that although the public “may be disappointed in the adoption of the electric vehicle,” GE — a major supplier to electric carmakers — is confident the outlook for battery technology will improve, and plans to keep investing in the area. Immelt dismissed the idea that electric vehicles are merely a short-lived trend, but acknowledged that the industry faces significant challenges in the areas of cost and infrastructure.
Electric cars generally carry a higher price tag than similar-sized conventional vehicles, and their batteries are extremely expensive. For example, the battery for Ford’s (NYSE:F) first all-electric passenger vehicle, the Focus Electric, costs $12,000 – $15,000, according to company executives. This means the battery alone accounts for about a third of the Focus Electric’s total price of around $39,000. Sales of electric cars have so far fallen below some expectations.
In recent years, several car companies, including General Motors Co. (NYSE:GM), Nissan Motor Co., Toyota (NYSE:TM), Ford (NYSE:F), and Tesla Motors Inc. (NASDAQ:TSLA), have introduced cars that run either partly or entirely on electric power.
Immelt remains positive that the market for electric vehicles will expand, and noted that GE does not invest in technologies just because they are trendy. But GE has a lot to lose if the investment doesn’t pan out. “For every dollar invested in electric vehicles GE has 10 cents of content,” Immelt said.