2 Transportation Revolutions to Buy Now

The transportation industry has been virtually stagnant for over 100 years. We still ship things by rail, we still fill up our vehicles with oil, and air travel hasn't changed a whole lot since the '50s. But two transportation revolutions are brewing as traditional forms of transportation become more expensive and new technology makes alternatives more economical.

Over the past few years the technology to power transportation with natural gas and electricity has become a real possibility in the U.S. Below I'll show you how to play the market now.

Natural gas
Over the past decade, the price of natural gas has plummeted in the U.S. and the cost of oil has soared. This has turned natural gas into a viable replacement for oil in transportation.

WTI Crude Oil Spot Price Chart

WTI Crude Oil Spot Price data by YCharts.

According to Clean Energy Fuels (NASDAQ: CLNE  ) , natural gas fuel costs up to $1.50 per gallon less than gasoline or diesel, which saves trucking fleets lots of money. The company is building a national network of natural gas fueling stations to take advantage of this trend and is quickly growing the number of stations across the country. Seventy LNG truck fueling stations are already open, including some at existing Pilot Flying J truck stops, and another 70 to 80 are expected in 2013. What Clean Energy Fuels needs now is a large fleet of heavy-duty trucks to hit the streets.

To make all of this possible, the technology has to exist to turn natural gas into usable power. This is where Westport Technologies (NASDAQ: WPRT  ) comes in, providing technology to engine makers like Cummins (NYSE: CMI  ) , Ford, and others.

Westport is still a small company with little revenue, but 2013 should change that. The company is introducing a new line of products in 2013 and the all-important launch of a heavy-duty engine from Cummins. It's these trucking products that will take hold first, but if they're successful, the infrastructure will be in place and the consumer market might not be far behind.

2013 could be the year that natural gas transportation goes from pipedream to mainstream in a big way.

Electricity
Natural gas will be the first step away from using oil for transportation, but electricity is the holy grail. But unlike the natural gas market, electric vehicles will start with consumers, particularly on the high end.

Tesla Motors (NASDAQ: TSLA  ) is having a lot of success selling into the high end of the passenger market with the Roadster and now the Model S. The company is also introducing a crossover vehicle called the Model X and is developing a new Roadster to round out a full line of vehicles. This is one of the best ways to play the electric vehicle industry right now.

There are other players in EVs, including big names like Ford, Nissan, General Motors, and Honda. These larger manufacturers have had less success so far because they've made shorter-range vehicles for the mass consumer. These customers don't have the extra cash to buy an EV, and if they did they would need much more than a 50-mile range. But this lack of success won't last long, because new technology and lower costs are just down the road.

There are still a lot of questions and challenges ahead for the EV market. Two big battery makers, A123 Systems and Ener1, have already gone bankrupt, and a number of dedicated EV manufacturers have had major financial problems. But every revolution has growing pains, and I think long-term this is one investors should keep a close eye on.

Foolish bottom line
I'm going to make outperform calls on Clean Energy Fuels and Westport Innovations, and keep my outperform call on Tesla, because I think these are the three best ways to play these two transportation revolutions.

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