Yesterday's 7% drop once again emphasized the long and arduous road that lies ahead of Clean Energy Fuels. The natural gas marketer plunged on Wednesday after being downgraded by Piper Jaffray, in addition to a reduced outlook from strategic partner and natural gas engine producer Westport Innovations. A poor economic outlook, and decreasing adoption of natural gas-powered vehicles, are pinpointed as the main catalysts of Westport's 20% cut in revenue guidance.
For Clean Energy, this slowdown reinforces the necessity of creating strategic relationships in order to increase the amount of natural gas-powered vehicles. CLNE needs an increased espousal of natural gas automobiles to sustain the intricate infrastructure of natural gas filling stations, but the switch will be cumbersome until that same infrastructure is in place. This chicken and egg dilemma will be a significant hurdle for Clean Energy Fuels, one that can be only made more manageable with additional strategic partners.
The movement toward alternative energy is slowly gaining momentum, and Clean Energy Fuels has the first mover advantage; but if it's poised to make a big impact on the industry, the company will need to continue to innovate. If you currently own or are looking to buy CLNE, be sure to read all about this fascinating company in our brand-new report. Just click here to get started.