In late May, GE Capital Fleet Services officially opened its new Vehicle Innovation Center at its headquarters in Eden Prairie, Minn. At first glance, the new facility is a way to showcase the wide range of alternative-fuel vehicles available to fleet managers today. Looking deeper, it’s also a place where GE can bring together fleet industry stakeholders, potential fleet customers, other GE customers, and outside organizations, such as universities, in order to advance alternative-fuel vehicle education and adoption.
Green Fleet magazine spoke with Deb Frodl, the Chief Strategy Officer for GE Capital Fleet Services & GE’s Global Alternative Fuels Leader, about the new facility, how it fits into the company’s business strategy, and the future of alternative-fuel vehicle adoption in the fleet industry.
Right Location, Right Time
When any organization opens a new facility, location choice is a critical factor in its usability. For GE, the headquarters of its fleet management business in Eden Prairie was the perfect location.
“We are fortunate to already have so much connectivity with our customers,” Frodl said. “We have hundreds of customers coming to our headquarters annually that we’re already doing strategic consulting or reviews with, so this creates a great opportunity to engage them in a discussion about the technology of alternative-fuel vehicles through that process.”
Frodl explained how the new facility will fit into GE Capital Fleet Services’ consulting process for its customers. To start, visiting customers will go through the in-depth analytical fleet performance review that GE provides, but from there, they will have an opportunity to drive a wide range of alternative-fuel and alternative powertrain vehicles and learn more about the technologies involved and currently available. Integrating a ride and drive and education session helps GE’s fleet customers evaluate their alternative-fuel vehicle options and determine which may work in different applications.
“It’s not just about the vehicles themselves but to educate customers about the various solutions and technologies that GE offers that can help them adopt those alternative-fuel vehicles,” Frodl said. “Part of our core competency and our whole value proposition is our exceptional strategic consulting team. We help our customers find the right technology for the right application and then calculate total cost of ownership (TCO). For many customers it boils down to that, but others may have sustainability or operational goals where they have to reduce fuel costs by 50%, for example.”
The facility isn’t just open to GE’s current customers, although that’s still a core focus for the facility. Frodl said the opportunities the facility presents go beyond the fleet industry.
“We’re hosting a variety of people and companies who are not customers today,” Frodl said. “We want to engage with corporate fleets, universities, and community stakeholders. Business-to-business is our primary focus, but we’re opening the center up to other interested groups. For example, we recently hosted a local STEM (science, technology, engineering, and mathematics) school visit to engage and educate several classes of talented schoolchildren with these incredible technologies. We’re hoping that, because the Vehicle Innovation Center showcases a broader range of GE technologies, other GE customers will come here as well. They might not necessarily be a fleet customer today, but they can come here and engage in the broader GE ecomagination strategy.”
GE’s Frodl added that government fleet customers are also welcome to visit, though GE Capital Fleet Services focuses on working with corporate fleet customers. GE Capital Government Finance is the sisters company that government fleets can work with if interested in what GE has to offer. One example of technology that would be of interest to fleets that are “hub-based” and have on-site fueling would be GE’s new CNG technology.
“We have charging station technology on display, the infrastructure that aligns with electric vehicles,” Frodl said. “We will have at least a demonstration model of GE’s ‘compressed natural gas in a box.’ It’s a fueling station for natural gas. If, for example, a customer wanted it behind a fence on their property, we could provide financing for them.”
What’s In Store for Visitors
The Vehicle Innovation Center is first and foremost focused on available and upcoming alternative-fuel vehicle technologies, and it’s designed as a dynamic showcase for them. Frodl said the automakers have been great partners in the process of getting the vehicles on-site ready for visitors to drive them. As manufacturers come out with new models and develop new technologies, GE plans to bring them to the Center. The education center’s content will change over time, too.
““We have the physical building, where there are meeting rooms, garages, and the road course, but we also have an education center,” Frodl explained. “There are touchscreens in the education center, and it will be easy for us to update them with new content. We can display new data insights on those screens as we learn more and begin to increase vehicle deployments. As new innovations arrive, and we develop new solutions, we’ll switch the displays out. It’s not like a museum that will stay the same for the next 10 years. We expect it to be very dynamic and interactive, with rich content, especially because this is all new and because we’ll be seeing an evolution of these technologies over the next 10 and 20 years. The short-term, and long-term, goal is to continually evolve.”
GE also showcases its non-automotive technologies that fleet customers may want to use professionally or personally.
“It really showcases the breadth of what GE has to offer. In the education center, we’re trying not to just focus on alternative fuels,” Frodl said. “When you walk into the facility you see all of GE’s LED lighting products, some appliances, windmills and solar [power generation technologies], and a variety of things that those companies may need and be interested in. We also have smart business and smart home technologies on display, because we reach the fleet manager not only corporately but also as an individual. We’re trying to show them our ecomagination technologies and products through this experience, too.”
Beyond updating vehicles and the content and displays in the education center, GE Capital Fleet Services plans to host a range of events at the Vehicle Innovation Center, and in fact has already started doing this.
“We’ve now had a NAFA regional event here. We’ve had OEMs do immersion days around their vehicles for our employees and customers,” Frodl said. “There is significant interest from a broad stakeholder group in the industry, so we’re embracing that. Our employees want to help and be ambassadors to our stakeholders in order to help our customers learn more about these technologies. There will also be future events, such as training sessions, immersions, and industry events, that people can participate in.”
Fleets and Alternative Fuels
GE’s Frodl said experience and knowledge of how fleets use alternative-fuel vehicles is key to working with the company’s customers. She said GE has changed its own fleet’s alt-fuel strategy as it has learned what works in different fleet applications and is putting that knowledge to use in its consulting services.
The company’s primary experience stems from an initial commitment 18 months ago to replace 15,000 vehicles in its own fleet with alternative fuel vehicles. Frodl described this commitment as a “first-mover” strategy designed to spur adoption in the market, help the company learn more about alternative fuel vehicle technology, and build out charging infrastructure. The company isn’t focusing only on EVs, though. Now, GE is integrating other types of alternative-fuel vehicles, for example compressed natural gas (CNG) and liquefied natural gas (LNG).
“Although the strategy started with GE’s commitment, our goal is to help our customers choose the right technology for the right application,” Frodl said. “Many of our customers have everything from a sedan to a class 8 truck, which creates opportunities for EV, CNG, LNG, and other alternative fuel vehicles.”
With the economy experiencing slow growth at best, though, Green Fleet wanted to know whether reducing costs has trumped sustainability goals at this time. According to Frodl, sustainability is still a key performance indicator.
“Many of the larger corporations have significant sustainability goals, and the CEO is behind those goals,” Frodl said. “If the company is publicly traded, those goals are metrics for them. A number of Fortune 50 companies are ahead of the curve for their commitment. They’re making real progress.”
Frodl said fleets adopt alternative-fuel vehicles based on a number of factors, but one of the most important is simply whether the vehicles are available for our customers’ needs.
“We’re seeing EVs and compressed natural gas (CNG) vehicles as some of the leading technologies our customers are interested in. What we’re seeing initially on the EV side is that there is just more choice in the sedan space than in other vehicle segments,” Frodl said. “You’re starting to see various companies that have sales fleets looking at EVs. There is also a lot of interest in CNG. Prices for that fuel are highly attractive. You also have OEMs that are very committed to CNG. Chrysler and GM are coming to market with CNG trucks that are perfect for commercial fleet application. There is a growing level of interest among fleets as the OEMs come to market with new products. We’re having discussions with many of our customers about what the sweet spot is for them.”
What about other fuel types? Frodl said some fleets, for example those with delivery trucks, are interested in propane autogas. Hydrogen, on the other hand, is a few years out. She said this is due to a lack of vehicles, fueling infrastructure, and current technological limitations.
Going back to alternative-fuel vehicles in general, Frodl said having actual vehicles to drive, which is what the Vehicle Innovation Center provides to visitors, is crucial to adoption. The fact that GE had alternative fuel vehicles from more than 20 manufacturers on hand for the grand opening of the Vehicle Innovation Center is a testament to the fact that the technology is real and ready for deployment.
“Let’s gets some cars. People will start to embrace alternative-fuel vehicles once they understand the technology and can see it,” Frodl said. “It’s just like when hybrids came to market. It took time before there was big adoption. It requires a choice of vehicles, and that requires the OEMs to come to market with more products. We are already seeing more EVs and CNG vehicles coming to market for 2013.”
Green Fleet wanted to know whether GE is seeing regional trends in alternative-fuel fleet vehicle adoption. Frodl said that although there are some differences, for example greater interest in EVs on the west coast (partially due to incentives and HOV lane privileges) and interest in CNG and LNG in states such as Oklahoma and Texas, she believes the regional differences will disappear over the long run. Adoption is driven by early infrastructure availability as well.
“I think we’re starting to see some regional changes, but getting back to corporate sustainability, most large fleets are operated by multinational corporations,” Frodl said. “If you look at the telecommunications companies, and delivery companies, and conglomerates like GE, those organizations are operating in all 50 states.”
For the fleet industry, it’s still the early days of alternative-fuel vehicle adoption, with fleets encountering a range of challenges, from gaps in available infrastructure to unpredictable residual values. With the new Vehicle Innovation Center, GE Capital Fleet Services is working to help its customers make the right choices by giving them on-road experience with the latest alternative-fuel vehicles. As vehicle technology advances, so will the Center. GE will continue to innovate and develop new solutions to meet the needs of customers and help move the fleet industry forward.
By Greg Basich