Sometimes technology doesn't develop as quickly as we like or companies don't make the progress we expect as investors. At the end of the year, sometimes our questions have gone unanswered.
We asked three of our Fool contributors what questions they had left unanswered as 2014 came to a close.
Travis Hoium (Where are the drones?): It was late in 2013 that Amazon.com brought commercial drones to America's attention with a feature on 60 Minutes. More than a year later, we're not much closer to knowing what the future of drones will look like.
A few companies have started flying commercial missions under the FAA's watch. Small drone maker Aerovironment (NASDAQ:AVAV) and Boeing's (NYSE:BA) subsidiary Insitu have been flying commercial missions in 2014, primarily for oil and gas companies in very remote locations. But we're a long way from delivery drones flying around our neighborhoods.
What wasn't answered in 2014, and is the biggest challenge for drones in general, is how to make them safe enough to fly near people. The FAA doesn't want drones crashing into your yard, crashing into each other, or worse -- hitting someone and causing personal injury. There have already been cases of drones crashing at sporting events around the world and that's before the industry really takes off.
The opportunity is huge for investors if drones become commonplace in the future. BI Intelligence estimates the commercial drone market will be $12 billion in the next decade and that estimate could be low given the interest in hobby drones.
2014 didn't give us a lot of answers as to who will win in the future of drones or even what the landscape will look like, but maybe 2015 will. As someone who thinks drones present a lot of opportunity for business and personal use, I hope FAA rules are coming soon.
Jason Hall (Is natural gas fuel viable?): America has massive natural gas reserves, and the costs to produce and distribute that gas are so low, that chemical companies have committed more than $100 billion in domestic investment, shifting good paying jobs back to America from abroad.
However, the same promise for natural gas-powered vehicles is yet to get any serious momentum, as evidenced by the collapse in the share prices of Clean Energy Fuels (NASDAQ:CLNE), Westport Innovations (NASDAQ:WPRT), and Quantum Fuel Systems Technologies (NASDAQ:QTWW):
For investors who have been waiting for the potential of this growth industry to become reality, patience is wearing thin. At the beginning of 2014, compressed natural gas, or CNG, was $1.50 per gallon cheaper than diesel. By the end of the year, the spread had fallen to only $0.78 per gallon. That's still a substantial savings for truckers that can easily use 20,000 gallons per year, but cheap oil will further delay many fleet operators from making a big move to NG-powered vehicles or heavy trucks that can cost tens of thousands of dollars more than diesel or gasoline versions.
Clean Energy Fuels' existing customers will continue to use their NGVs, but Westport and Quantum Fuel Systems need to see sales growth. Will this ever happen? 2014 didn't tell us. Will 2015?
Ford CEO Mark Fields describes the company's F-Series pickups as its "crown jewels." They're America's best-selling vehicles, and they generate more profits for Ford than any other product it sells anywhere in the world. As Ford's pickup sales go, so go its profits -- and its stock price.
That means Ford's move to aluminum body panels on the all-new 2015 version of its F-150 represents a very big gamble: Will pickup buyers -- who tend to be conservative when it comes to innovations, and who prize toughness and durability -- go for a pickup made of aluminum rather than steel? And will the move to aluminum, which was made for fuel-economy reasons, be a selling point for buyers when gas is falling under $2 a gallon?
It's a big gamble for other reasons. Switching Ford's two pickup factories over to making the new pickups required 12 weeks of downtime at each factory. (The first one was completed in November, the second is being converted now.) That downtime means about 90,000 units of production lost for Ford -- and those short supplies meant its pickup sales were down in 2014 while arch-rivals General Motors and Fiat Chrysler posted big gains.
Right now, Ford dealers are selling a mix of old 2014 trucks and the all-new 2015s. The new trucks have been selling very quickly, Ford says, but with supplies so limited it's hard to tell the true strength of the demand.
Ford says that it will have both factories up at full speed and its dealers fully supplied with the new aluminum trucks by around June. That's when we'll finally get the answer to our question.
Jason Hall owns shares of Clean Energy Fuels and Westport Innovations. John Rosevear owns shares of Ford and General Motors. Travis Hoium owns shares of AeroVironment and Ford. The Motley Fool recommends AeroVironment, Clean Energy Fuels, Ford, General Motors, and Westport Innovations. The Motley Fool owns shares of AeroVironment, Ford, and Westport Innovations. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.
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