When you think about clean energy vehicles, you probably think of Tesla's (NASDAQ:TSLA) electric cars, or maybe the Nissan Leaf or GM's Chevy Volt. What you probably don't think about is 18-wheeler semitrucks.

Natural gas fuel specialist Clean Energy Fuels (NASDAQ:CLNE) has been working for years to change that. Though its market cap is small -- less than $500 million -- it has plenty of big plans. Over the years, it has hit more than its share of speed bumps.

However, Clean Energy's efforts may be finally paying off. Here's why the stock looks like a buy now.

A semi truck at a Clean Energy Fuels filling station.

Image source: Clean Energy Fuels.

The debt is paid

The company, co-founded by energy maverick T. Boone Pickens, started out with an "if you build it, they will come" model. It took on a lot of debt to build "America's Natural Gas Highway," lining a coast-to-coast route with natural gas filling stations and placing more in major urban centers to make it easier for trucking companies to switch their fleets to from diesel to natural gas. 

But as luck would have it, right about the time America's Natural Gas Highway was completed in 2014, the price of oil collapsed from more than $100 a barrel to about $30 a barrel. All of a sudden, the economics of switching from a diesel-powered trucking fleet to a fleet that ran on natural gas stopped making sense.

Clean Energy Fuels was left with more than $600 million in debt on its balance sheet. But that debt has essentially being paid off. On the company's first-quarter earnings call on May 7, CEO Andrew Littlefair said, "[W]e paid $35 million of convertible notes earlier this week and will pay off the last $15 million on May 14, leaving us with no debt other than equipment financing." With $69.5 million in cash on the balance sheet, the company's financial position looks solid. 

The sales are growing

It's worth noting that Clean Energy managed to retire a lot of that debt using cash it raised by issuing more shares. In 2014, the company had fewer than 100 million shares outstanding; by 2019 that had ballooned to more than 200 million. Prior investors saw the value of their shares cut in half. 

More recently, however, the company has been raising cash the right way -- by selling fuel. Clean Energy has been cash-flow positive since 2018, and even managed to eke out a $33 million profit in Q1 2020. Before the pandemic hit, its fuel sales volumes were steadily growing, especially for its Redeem biofuel. Sales of Redeem grew 30% in 2019, and are expected to continue growing once this health crisis ends.

The gas is clean

As the first commercially available renewable natural gas (RNG) fuel, it's hard to overstate the importance of Redeem to Clean Energy's future. Most biofuels, like ethanol and biodiesel, are primarily used as additives to traditional gasoline or diesel. Redeem, on the other hand, is usable on its own as a replacement for either compressed or liquefied natural gas. 

Derived from methane captured from landfills and farms, Redeem qualifies as carbon-neutral and can even be considered carbon-negative. It has proven especially popular with companies that own big truck fleets and are trying to meet emissions reduction targets. In 2019, for example, shipper UPS signed a seven-year contract with Clean Energy for 170 million gallon-equivalents of Redeem, the largest-ever RNG purchase in U.S. history.

And Redeem isn't the company's only RNG initiative. In a major development, Clean Energy is partnering with oil major Chevron to supply RNG to trucks at the ports of Los Angeles and Long Beach. Shares of Clean Energy have risen about 7% since that news was announced on July 7.

The stock is compelling

Even after the share price bump that followed that Chevron announcement, Clean Energy's stock still looks compelling. For all of Tesla's hype about its planned electric semitruck, or newcomer Nikola's ambitions to make fuel-cell electric semis a reality, the only renewable fuel trucking option on the market right now is a natural gas-powered semi using RNG fuel. 

As an investment, this stock is not without risks. It's certainly possible that the company will hit more speed bumps in the coming years. Right now, though, Clean Energy Fuels looks like it's finally turning the corner.