Clean Energy Fuels (CLNE, Financial) is seeing strong momentum in Transit, Refuse and Fleet Services. Clean Energy continues to sign new fueling deals even as it opens new stations for its customers. Along with this, the existing natural gas truck fleets have increased their orders, which is an encouraging sign of growth. Moreover the management doesn’t feel threatened with the declining oil prices, since there is a similar decline in natural gas prices.
In spite of these positives, there is a widespread reluctance to adopt the alternative fuel on account of the incremental cost of trucks. To rectify this issue, Clean Energy is in talk with the leaders in natural gas fueling space to bring down the incremental costs of trucks. In fact the management is leaving no stone unturned to provide solutions for its customers, which includes various options such as leasing programs, LNG, tank and cylinder deals among others.
Smart initiatives
The best example of these initiatives is the Dillon Transport deal, which the company signed recently. Under this contract Clean Energy will open three truck-friendly public CNG stations to support Dillon's growing fleet of 200 natural gas trucks, which has an annual fuel consumption of around 2.5 million gallons. The management is confident that with such efforts the alternative fuel market will continue to grow steadily and will yield good return in the days ahead.
And to support this growth, the company is investing in infrastructure, which will play an important role for its growth. Its revenue improved considerably during the quarter along with a successful improvement in adjusted EBITDA. Although the stock has tanked near its all time lows but its future prospects are encouraging. Therefore, investors must keep a close eye on Clean Energy as it could yield a good return from a long term perspective.
For the heavy duty trucking market, there’s enhanced fleets testing and higher orders for trucks, and the engine orders are estimated to expand compared to last year. Hence, Clean Energy is continuously signing new fueling contract and opening stations for its customers, and is witnessing order increase for its current fleet of natural gas trucks.
In addition, the customers of Clean Energy save money additionally by leveraging natural gas as a fuel, since natural gas is cheaper to diesel. Also, the incremental cost is expected to reduce with a significant adoption of this fuel for the trucks.
Conclusion
Clean Energy is working closely with almost all the leaders in the natural gas fueling market for bringing down the incremental costs of the trucks. These include dealer education, network fuel deals, tank and cylinder deals, LNG and leasing programs.
