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Westport Innovations Inc. (USA) (WPRT): Why Aren’t More Vehicles Running on Natural Gas?

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Join The Motley Fool’s Austin Smith for a video chat with Sandeep Munshi, director of technology and development at Westport Innovations Inc. (USA) (NASDAQ:WPRT). Based in Vancouver and with facilities in eight other countries, Westport is the industry leader in natural gas engines and vehicles.

Munshi doesn’t see any particular obstacles to natural gas adoption, but rather a series of steps that need to be taken, each of which takes time. He also addresses the issue of intellectual property in this ever-expanding field, and why Westport Innovations Inc. (USA) (NASDAQ:WPRT) isn’t concerned about patent expiration.

To watch the full interview, click here.

Austin Smith: From a technology perspective, what do you see as the biggest prohibitor, or the thing that’s restricting natural gas vehicle adoption today?

Sandeep Munshi: I don’t see any single prohibitor that would prevent adoption. I guess with any technology, when you’re talking shifting from traditional means of transportation or traditional technologies — that includes diesel and gasoline engines — it takes some time.

Just the inertia — you require the infrastructure, you require public awareness, you require the investment. It’s kind of a merging of all these efforts that is required to transform the market from where it is today to where you want it to go.

That, itself, takes time. You have to be on your toes to meet those requirements, and I believe at Westport Innovations Inc. (USA) (NASDAQ:WPRT) we are working toward that.

It’s not just the technology. It’s not just the fuel. It’s not just the engine. It is the whole spectrum, from the supply chain, the technology, the customers, the environmental regulations — the whole gamut of things that go into making the natural gas as a success story.

I believe that effort needs to be there, and that needs to be continued in order to make that transition.

Smith: From an investor perspective, one of the most exciting things about Westport Innovations Inc. (USA) (NASDAQ:WPRT) would seem to be your intellectual property and your big patent portfolio, but at some point the useful life of patents … they expire.

I’m wondering what you guys have done to preserve that intellectual moat around the company.

Munshi: Good question. Over the years, Westport Innovations Inc. (USA) (NASDAQ:WPRT) has been a leader when it comes to natural gas fuel and engine technology-related intellectual-property portfolios. We have the largest number of active patents that relate to all the variety of the aspects of natural gas engines and fuel.

It includes the engine itself, the combustion in the engine, the fuel system, the after-treatment, the specific components that go on a natural gas vehicle — the whole spectrum of technologies that make it into a natural gas fuel and natural gas engines.

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