On one hand, the transportation of people and things is a pretty basic concept that hasn't changed all that much over time, on the other, it's a constantly evolving space. Here are three companies to watch in transportation that are pushing big changes in an otherwise boring sector: Clean Energy Fuels Corp (NASDAQ:CLNE), Tesla Motors Inc (NASDAQ:TSLA), and Google Inc (NASDAQ:GOOGL) (NASDAQ:GOOG).
Of the three companies above, Clean Energy is the one you've probably never heard of. But that's OK -- it isn't looking for your business. Clean Energy primary focuses today is on providing fuel to trash collectors, buses, and fleet vehicles (taxis). The interesting thing about the company is that the fuel of choice is natural gas.
The big change the company is pushing for over the long run is on the interstate highways, where Clean Energy is building a network of liquified natural gas stations for long-haul trucks. It currently has 100 or so stations, allowing it to reach into an industry that uses some 25 billion gallons of fuel a year.
The reason to switch is cost: With low natural gas prices, it's cheaper to use than oil-based fuels. It's also cleaner, which is another big benefit. But who's really going to switch? Roughly 60% of trash vehicles sold today are natural gas powered, up from 3% in 2008. That number for heavy-duty trucks is sitting at around 3% today. You may never have a natural gas powered car, but that doesn't mean the fuel won't be a big player in the transportation industry.
Speaking of you!
So, natural gas is an up and coming fuel for commercial use, but electricity is the up and comer on the consumer side. And on that front, Tesla is probably the biggest name in the industry. Don't read that to mean it's the biggest electric car producer, because it isn't. But Tesla and co-founder Elon Musk are the headline acts of the electric car market.
The hype has driven, pardon the pun, Tesla's stuck up to incredible heights for a company that doesn't make any money. (OK, it did earn $0.10 a share in the first quarter of 2013, but it's been all red ink since then.) And while it's easy to bash the company for not making money, Tesla does make really nice cars.
That, of course, is part of the problem. It's playing at the high end of the market with a niche vehicle. But the goal is to create an all-electric car, the Model 3, that's within reach of the masses in 2017. If Tesla can hang on to its cache until then, it might be the push all-electric vehicles need to go more mainstream.
And don't forget the ecosystem to support all-electric vehicles Tesla is creating. That includes the Gigafactory to reduce battery prices and a global network of quick fueling stations so drivers can top up when they aren't at home to plug in. Is Tesla the best car company ever? Probably not. But it is pushing hard to change the way you and I drive, and that makes it worth watching.
Speaking of driving...
Then there's Google. The Internet search giant and advertising king pin seems an odd discussion point in an article about transportation, but have you heard about its self-driving cars? That's right, cars are driving themselves sci-fi style in California, and Google is behind the technology.
Forget changing the fuel you use... changing the driver would be a monumental shift in the transportation industry. Don't expect a self-driving car to show up in showrooms anytime soon, but don't ignore this technology if you are watching the space. It could be a real game-changer for you and for auto makers. And while Google isn't the only one working on this, it is probably the highest-profile player right now.
The only problem is, well, you and me. It seems that Google's cars get into accidents, too. So far, it looks like inattentive drivers in other cars are causing all the crashes -- not the computer-controlled variety that are following all the rules. From my perspective, that's the biggest problem: Driving isn't all black-and-white decisions. In fact, the really important choices are often the ones with the most uncertainty involved.
Google is clearly pushing the boundaries. And since cars are long-lived assets -- 10 years or more in most cases -- it will be a long transition before the streets are filled with computer-controlled autos. But that doesn't mean the technology should be ignored. Google is a major player to watch in the transportation space even though its real business is advertising.
Out of left field
Sure, it would have been easy to tell you to watch three auto and truck makers in the transportation industry. But such companies are invested in the status quo. Clean Energy, Tesla, and Google, on the other hand, are taking on normal, which makes the trio of outside-the-box companies some to watch in the transportation industry -- their efforts could bring about the really big changes.
Reuben Brewer has no position in any stocks mentioned. The Motley Fool owns and recommends Google (A shares) and Tesla Motors. The Motley Fool recommends Clean Energy Fuels. 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.