One of the biggest drawbacks of battery powered cars is, well, the batteries. For example, Tesla's (TSLA 3.23%) Model S can only drive 265 miles before needing a recharge that can take up to nine hours. That's not practical for long drives, but in something of a publicity stunt, Tesla built a quick-recharge network so customers can drive from the West Coast to the East Coast.
If you build it...
Don't be fooled; Tesla's recharge network is no Field of Dreams. But it's a great way to help assuage customer concerns on the sales floor. And it exposes one of the key problems facing new automotive technology—the existing infrastructure supporting gasoline.
The company made a big deal about the first cross country trips using its recharge network, but a look at the numbers is concerning. For example, the drive time was 59.5 hours. The fueling time was 15 hours! The total trip, including 30 minutes to put on tire chains, was around 76 hours. The trip time could have been cut by nearly 20% if they had just driven gasoline powered cars...
But Tesla knows it has to build this network or it will always have to fight the range question. That's why it's building out a similar network in Europe. Essentially, this is the same reason that Clean Energy Fuels (CLNE -3.34%) is building out a network of natural gas fuel stations on the U.S. superhighway network even though the heavy truck switch to natural gas is only just getting under way.
A different market with more opportunities?
The differentiating factor here is that Clean Energy Fuels is targeting industrial buyers. It's goal is to provide the fuel for a conversion from diesel for long-haul trucks to liquified natural gas (LNG). It believes this to be a $25 billion market opportunity, and it already has a solid position in regional markets like trash hauling to prove the model out.
This market focus makes a huge difference. Trying to convince millions of individual customers that it makes sense to take a risk on new technology is a lot harder than trying to persuade a few key buyers. That's particularly true since individuals are driven more by emotion than numbers, but a few good numbers will easily convince a company CFO.
For example, United Parcel Service (UPS -1.11%) had been testing LNG trucks for a few years before deciding that the technology was up to snuff in 2012. It then made plans to buy 1,000 LNG trucks! Being able to save up to 40% on fuel costs over diesel made that choice a lot easier.
And UPS isn't the only big company looking to make the switch. Royal Dutch Shell (RDS.B) is looking at switching to LNG in its Canadian Oil Sands operation, and CSX (CSX -0.32%) is testing LNG for its trains. CSX is partnering with General Electric (GE -2.61%), which is also a key partner to Clean Energy Fuels.
Although Tesla is far from alone in its efforts to switch autos from gas to electricity, Clean Energy has a lot of big names in its corner, too. GE is just one of them. The industrial conglomerate is providing LNG technology to Clean Energy and financing support to truck buyers who sign a fuel supply deal with Clean Energy. But it also has key partners in companies like Waste Management (WM 0.49%), which has already started the big switch. And every major truck manufacturer is now offering LNG trucks.
Tesla certainly captures the imagination if you like the idea of switching to a cleaner fuel. However, it isn't the only company trying to convince customers that there's a better way to turn an engine. On that front, Clean Energy and its list of key partners, like GE, appear to have a much better foothold in the industrial market than Tesla has in its retail focused business.
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