Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Westport Innovations Inc. (USA) (WPRT), Ford Motor Company (F): Natural Gas-Powered Vehicles, Who’s Buying?

Join Motley Fool analyst Brendan Byrnes for a video conversation with Ian Scott, the executive vice president of Westport Innovations Inc. (USA) (NASDAQ:WPRT)‘ on-road systems segment, which works with OEM partners such as Ford Motor Company (NYSE:F), Volvo, Kenworth, and Peterbilt to produce natural gas-powered vehicles in the U.S. and elsewhere.

Not surprisingly, natural gas vehicles sell best in areas that offer the infrastructure required to refuel them. Scott says those areas currently include states rich in natural gas, such as Oklahoma and Texas, although infrastructure development is expanding to other regions.

To watch the full interview, click here.

Brendan Byrnes: What kind of customers are you and Ford Motor Company (NYSE:F) seeing as buying these F-250s, 350s, and soon to be 450s and 550s? What kind of customer would need these and use these?

Ian Scott: They’re typically work vehicles, so they’re larger vehicles. Having said that, we are seeing some retail consumer buying — farmers, et cetera — that see the advantage of using natural gas, mainly due to the cost, obviously, as it’s a much cheaper fuel.

Target customers initially are oil and gas companies. With respect to natural gas, at the retail pump you can get an advantage of maybe $1.50 — even more in some jurisdictions — per gallon over gasoline, over diesel.

What happens is you get the fleets that have to pay retail, but then you have the oil and gas producers that get a much lower-cost fuel. For them, they may be saving $2.00-2.50 a gallon. These are what we’re seeing initially, are the fleet buyers, the commercial buyers, that get these cost advantages.

Byrnes: Geographically in North America, are you seeing areas where you get stronger sales, and what are those? Maybe where the infrastructure is a little bit more built out?

Scott: Yeah. If you’re talking about the pickup trucks specifically, Oklahoma, Texas — these jurisdictions where you have very strong fuel price differentials. The fuel price does differ, depending where you are, where the infrastructure is.

Regionally we see — I think it’s safe to say Oklahoma, Texas is one of our strongest markets at the moment, but there are others. We see the Northeast really growing right now as well. It’s getting more aggressive.

Quite often what you see is the attractiveness regionally is directly related to where they’re producing the natural gas.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.