As the most advanced designer of engines powered by natural gas, Westport Innovations Inc. (USA) (NASDAQ:WPRT) is a small company with a big goal: to lead the world in transitioning away from traditional oil-based fossil fuels in favor of abundant, cheap, and clean natural gas. The company has a price tag large enough to match its ambition, and will need to grow revenue quickly in order to justify sky-high expectations. To help you determine whether Westport Innovations is right for your portfolio, The Motley Fool has released a premium research report breaking down the company’s opportunities, competitive advantages, and risks. Today, you can get a free sneak peek at the report, detailing two key developments for Westport Innovations Inc. (USA) (NASDAQ:WPRT) Innovations. Enjoy!
One of the biggest impediments to natural gas engine adoption is the scarcity of natural gas infrastructure. That’s why Westport’s biggest successes so far have been with vehicles that return to a base every day where they can refuel: municipal buses, garbage trucks, forklifts and the like. To break out of the return-to-base model, vehicle operators need to be sure they can refuel out on the road. Luckily, Westport Innovations has some help here.
Oil tycoon T. Boone Pickens has put his weight behind Clean Energy Fuels Corp (NASDAQ:CLNE) , a natural gas refueling infrastructure provider with a plan to construct 150 LNG stations nationwide by the end of 2013, allowing long-haul truckers to run LNG vehicles on fixed, cross-country routes. North of the border, Royal Dutch Shell plc (ADR) (NYSE:RDS.A) is building LNG refueling stations on a 900-mile stretch from Vancouver, British Columbia, to Fort McMurray, Alberta, near the epicenter of Canada’s oil producing tar sands.
These infrastructure initiatives are critical for Westport Innovations Inc. (USA) (NASDAQ:WPRT). With a broad and growing network of refueling stations, Westport’s addressable market could expand to include the lucrative trucking market in the short term, and every vehicle with an engine in the long term. Without a refueling infrastructure, natural gas engines will be resigned to a small and ultimately unprofitable niche market.