Clean Energy Fuels CEO: Why Tesla Isn't Competition, and Passenger Cars Aren't Clean Energy's Market

The difference between fleet and passenger vehicles is often misunderstood, Andrew Littlefair says. Andrew Littlefair is the CEO and co-founder of Clean Energy Fuels (CLNE 3.85%), the leading provider of natural gas for transportation in North America. Clean Energy provides CNG and LNG fuels to solid waste, trucking, and transit fleets, among others, and currently operates some 500 fueling stations in the United States and Canada, as well as manufacturing related equipment and technologies.

In this video segment Littlefair describes the biggest misconceptions people have regarding Clean Energy and natural gas in general, including the scalability of different alternative fuels. Tesla Motors' (TSLA 2.90%) battery technology is great for the daily commuter, and will be even better in the next three years. But battery tech is many years -- maybe decades -- away from being able to haul 80,000 pounds of freight the hundreds of miles truckers travel between refueling stops. Littlefair closes by sharing some key messages about Clean Energy Fuels with The Motley Fool community.

Jason Hall: In the broader media -- I think the answer may be something we already talked about -- but what's the biggest conception of the company that you see in the broader media?

Andrew Littlefair: Of our company in the broader media? That's an interesting question. I think what happens in the broader media -- maybe not some of the people like yourself that really understand us and focus -- they confuse the fleet business with the passenger.

Often, tucked in an article -- in The Wall Street Journal or someplace -- it will say, "Well, they're making progress, but there's 118,000 gasoline stations." Most people, when they focus on this, they have their individual experience -- passenger car experience -- hat on. They're not really focused on the business that we're in, so people confuse that.

Yes, if you look at 500 stations and you compare it to 118,000, that doesn't sound very good. When you take 500 stations and compare it to 5,000 diesel depots or so, that's not so bad.

Then I think there's a general confusion. We used to call it "alternative fuel du jour." People get confused. Electric; Tesla's doing really good, so therefore that means that's going to be an over-the-road truck. People don't understand some of the realities of energy that well.

Hall: Just because it has wheels and rolls on asphalt doesn't mean it's the same thing.

Littlefair: "Fuel cells are going to really be good, so we'll just do that." I think you're going to see that Tesla and electric vehicles are really great for certain applications. You've got some work to do before they're ready to ...

Hall: Moving 40,000 pounds worth of cargo.

Littlefair: Yes -- 80,000 -- and natural gas is really well suited for that and may not be, in the United States, particularly well suited -- just because of the infrastructure and the scale -- on the light duty side.

I still think it is weird, though, that you have 62 makes and models in Europe of natural gas vehicles. You can get about anything you want, but here you have one. So, I'm not convinced that that always has to be the case. I think natural gas can be cheap.

I think there's a little bit of that confusion about what fuels you have. You'll have people say, "Well, propane could be the fuel." Well, no, propane can't. Propane is all right, but you don't have that much propane. You don't have that much biodiesel. You just can't make that much of it.

Natural gas is really one of the only fuels that has scale, and most people just don't quite understand that.

Hall: Right. That definitely makes sense.

In closing, what would you like to leave our viewers with?

Littlefair: Just that we're really focused. We're excited about the opportunity and the size of the market. We feel like we've assembled a good team, and we've spent some money to do it. We've spent some money, and we've staffed up in order to address this big market.

We've always been the leaders in this business. We continue to be. This last heavy-duty trucking market really is the big enchilada. It's a huge market so it's exciting, but it's required a lot of capital.

I want your viewers to know that we're well-funded, that we're going to be careful with the capital, that we can afford the debt that we have in place, that we're very focused on our core markets that grow at about 20%, but we're also very focused on this big opportunity, and that we have the infrastructure in place.

Our job is to open a bunch of it this year, and I feel like things are coming along pretty well.

Hall: Great. I think you're right, I think 2014 is definitely positioned to be the year of (unclear).

Littlefair: Yes. I think that you've seen the tip. Now, guys are testing it, but everybody gets it. We don't go around arguing about whether or not you can use natural gas in transportation. Every fleet operator knows, and a lot of them won't do anything else.

This is the last market. It's going to take a little while, but I think we've already been at the tipping point, and now it's just how fast does it go?

Hall: Makes sense. Thanks again for taking the time.

Littlefair: Thanks a lot, appreciate it.

Hall: Thanks for tuning in, everybody, and Fool on!