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Natural-Gas Highway vs. Electric-Vehicle Highway

Travis Hoium
March 31, 2012

The race is on for the next generation of vehicle fuel in this country. Companies such as Clean Energy Fuels (Nasdaq: CLNE  ) , General Electric (NYSE: GE  ) , and Chesapeake Energy are pumping millions of dollars into building a natural-gas infrastructure that will navigate the country's highways. At the same time, AeroVironment (Nasdaq: AVAV  ) , ChargePoint, and PlugShare are contributing to an ever-growing network of electric charging stations.

So which one will win, and which one is worth investing in? Let's look at the trends.

Power availability
One of the challenges of getting fuel to fueling stations is the infrastructure necessary to transport fuel. But both natural gas and electricity have advantages over oil in this factor. Electricity runs to probably every major building in the country, so anywhere a fueling station is needed, electricity is available. Natural gas lines also run all over the country, through neighborhoods and industrial parks alike, so a majority of locations where you may want to build a station would be easily accessible.

Electricity may be a little easier to hook up in some locations, but it isn't as if natural gas is going to have to build a new infrastructure to keep up. Slight advantage to the electric-vehicle highway on this one.

Vehicle adoption
If a fueling highway is going to be built, and worth investing in, you need vehicle adoption to take place. There are really two paths these fuel sources are taking to adoption, and both have had their struggles. Electric vehicles have focused on the passenger market, with mixed success, and natural gas is focusing on trucking and buses.

The passenger EV market has been full of disappointing sales for General Motors' Chevy Volt and Nissan's Leaf. But Tesla (Nasdaq: TSLA