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.
Joel South has no positions in the stocks mentioned above. Taylor Muckerman has no positions in the stocks mentioned above. The Motley Fool owns shares of Clean Energy Fuels, General Electric Company, and Westport Innovations and has the following options: long JAN 2013 $16.00 calls on Chesapeake Energy, short JAN 2014 $15.00 puts on Chesapeake Energy, long JAN 2014 $20.00 calls on Chesapeake Energy, and long JAN 2014 $30.00 calls on Chesapeake Energy. Motley Fool newsletter services recommend Clean Energy Fuels and Westport Innovations. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.