There may not ever be a Ford Motor Company (NYSE:F) F-250 that runs on natural gas sitting in your driveway, but as the company’s fleet sales continue to rise, you could very well find yourself behind the wheel of such a truck while you’re on the job. If that’s the case, chances are it will have a bi-fuel engine in it courtesy of Westport Innovations Inc. (USA) (NASDAQ:WPRT).
This ol’ engine makes it on time
Westport Innovations Inc. (USA) (NASDAQ:WPRT) has officially rolled out its trademarked “WiNG Power System” in Ford Motor Company (NYSE:F) F-Series 250, 350, 450, and 550 trucks. The new bi-fuel engines (gasoline kicks in when the CNG runs out) have a range of 650 to 775 miles and don’t force you to give up any of the features you might be used to on a standard gas-powered truck: 6.2L V8 engine; 4×2 or 4×4 power train options; multiple cargo box lengths; multiple cab size options.
Ford Motor Company (NYSE:F) F-250 and F-350 trucks with WiNG Power System upfits. Credit: Westport Innovations.
At about $9,500, the upfit for the new engine is pricey, but as we’ll see later, it can be a very worthwhile investment for businesses to make.
More trucks
Ford is pushing the envelope when it comes to natural gas fleet vehicles, and it’s not stopping at Super Duty pickups. In fact, it offers 15 different 2013 vehicles that can run on either compressed natural gas (CNG) or liquefied petroleum gas (LPG) with factory-installed engine upfits.
Ford Motor Company (NYSE:F)’s 2013 natural gas vehicle options. Courtesy of Ford Motor Company (NYSE:F).
Ford has watched interest in its natural gas-powered trucks soar since the entire industry bottomed out in 2009. Since then, sales of CNG- or LPG-prepped vehicles have jumped 350%. The company sold more than 11,500 last year, and it expects that number to grow to more than 13,000 this year.
Sure, 13,000 vehicles is just a drop in the bucket, considering that Ford sold more than 70,000 F-series trucks in May alone, but it is an important drop nevertheless.
The market
Ford Motor Company (NYSE:F) is far and away the best game in town when it comes to natural gas commercial vehicles, largely because it has more options than the competition. You want a nat-gas taxi cab? Ford’s got it. Same with nat-gas dump trucks, cargo vans, and many, many Super Duty pickups.
The customers for these trucks and vans range from small businesses to big-time corporations. For example, AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ) both have large fleets of Ford E-series cargo vans. In fact, AT&T Inc. (NYSE:T) expects to bring its total of CNG-powered vans up to 8,000 by the end of this year. The company was operating about 5,200 as of the end of the first quarter.
Though Ford dominates the commercial nat-gas vehicle market, General Motors Company (NYSE:GM) isn’t shying away, and the company managed to snag some cash from AT&T Inc. (NYSE:T) when it struck a deal last year to deliver 1,200 Chevrolet Express cargo vans to the telecommunications giant. It marked General Motors Company (NYSE:GM)’s largest order ever for CNG vehicles.
Expect to a lot more of these big corporate deals to go down over the next few years. Purchasing fleet vehicles that run on natural gas offers businesses three major incentives. First, natural gas is cheaper than gasoline right now and is expected to remain so for the next few years. Current estimates break out the cost of a diesel gallon equivalent of fuel as so:
| Fuel | Price Per Gallon |
|---|---|
| CNG | $2.91 |
| Diesel | $3.89 |
| Gasoline | $4.08 |
Source: Energy Information Administration and Clean Energy Fuels Corp (NASDAQ:CLNE).
Compressed natural gas is significantly cheaper than the fuels were used to filling up with every day.
The second reason businesses employ natural gas vehicles is that they have lower emissions, which in turn results in a smaller carbon footprint for these organizations. On average, CNG emissions are 28% lower than gasoline or diesel, and if the CNG comes from landfill gas, emissions are 88% lower. Companies such as Waste Management, Inc. (NYSE:WM), which powers its trucks with gas from its landfills, are among the greenest operations. In fact, 85% of Waste Management, Inc. (NYSE:WM)’s new truck purchases run on natural gas. Should the day come when we see a price on carbon (production or consumption), that, too, will probably tilt the economics in favor of these cleaner, greener natural gas vehicles.
And finally, the third advantage of using natural gas as a fuel is that there is less wear and tear on the engine, compared with its diesel cousin, which also saves companies money in the long run.
What, no downside?
All of these advantages can benefit individual consumers as well, but removing the advantage of scale does bring about one big disadvantage: refueling.
Whereas corporations can pay to install centralized fueling centers for their natural gas fleets, that sort of facility is not only cost prohibitive for the individual, but existing corporate facilities are a;sp typically off limits to the public. There are about 1,000 natural gas fueling stations nationwide, but only 585 are available to the public. Compare that with more than 120,000 traditional gas stations and you see how far we have to go.
Bottom line
Ford estimates that upfitting one of these trucks to run on natural gas can cost an additional $7,800 to $12,500, depending on the model, fuel tanks, fuel injectors, and fuel lines. That’s a significant increase in purchase price, but one that many companies have made up in fuel cost savings alone over the course of only two or three years. This doesn’t take into account lower maintenance costs or any local tax breaks a business may get for low-emission vehicles, factors that could decrease the amount of time it takes to see a return.
If you haven’t driven a natural-gas Ford lately, that day may come sooner than you think.
The article Will This Engine Ever Make Its Way Into Your F-250? originally appeared on Fool.com is written by Aimee Duffy.
Fool contributor Aimee Duffy owns shares of Ford. The Motley Fool recommends Clean Energy Fuels, Ford, General Motors, Waste Management, and Westport Innovations and owns shares of Ford, Waste Management, and Westport Innovations.
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