On Tuesday, Cummins Westport -- the joint venture formed between Cummins (NYSE:CMI) and Westport Innovations (NASDAQ:WPRT) for the production of natural gas-fueled vehicle engines -- announced that it will be supplying engines for two of the largest transit fleets in the United States.
The first order comes from LA Metro, which is buying 550 New Flyer Xcelsior natural gas buses powered by Cummins Westport ISL G 8.9-liter engines, to be put in service in 2014 and 2015. LA Metro has taken out an option to purchase as many as 350 additional Xcelsior buses for its fleet and for contract operators in 2016.
The second contract comes from the San Diego Metropolitan Transit System, which is buying "up to 350" Gillig 40-foot low floor buses (manufactured by privately held Hayward, Calif.-based Gillig), and an additional 118 New Flyer 60-foot low floor articulated buses. All of these buses will be powered by the same ISL G 8.9L engine. The first 97 of these buses are scheduled for delivery this year, with a further 50 buses per year to be delivered over the next four years as SDMTS replaces buses in its current compressed natural gas-fueled fleet over time.
In a press release on the orders, Cummins Westport noted that there are currently more than 7,000 natural gas-fueled buses operating in North America. Today's orders and options, if exercised in full, have the potential to in one fell swoop increase the continent's usage of nat-gas buses by 20%.
Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Cummins and Westport Innovations. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.