GE Capital’s Transportation Finance business and Clean Energy Fuels Corp.[NASDAQ: CLNE], the largest provider of natural gas fuel for transportation in North America, have entered into a strategic alliance to accelerate the conversion of heavy-duty trucking fleets from diesel to cleaner-burning, less-expensive natural gas.
To take advantage of this opportunity, truck fleet operators will first work with Clean Energy to develop natural gas fueling contracts, and will then apply for loans and leases, including fair market value leases, from GE Capital to acquire trucks from manufacturers that produce commercial natural gas vehicles (NGVs). Clean Energy will then help offset the monthly cost of newly-acquired NGVs to make it consistent with the cost of a diesel truck, if the customer makes a fuel commitment.
“We think this alliance will help to open up the natural gas market for long-haul operators,” said Dan Clark, president and general manager of GE Capital, Transportation Finance. “The alliance will support the parties’ mutual goal of reducing the financial impact of transitioning to natural gas and lowering the industry’s environmental footprint.”
Class 8, or heavy-duty, trucks can use both compressed natural gas (CNG) and liquefied natural gas (LNG). Both CNG and LNG cost significantly less than diesel — a key factor considering that fuel comprises nearly 40% of a typical over-the-road carrier’s operational costs.Two of the factors that had delayed the transition to natural gas in the over-the-road trucking industry were related to technology and infrastructure. With the ongoing refinement and expanded availability of natural gas engines by commercial vehicle manufacturers and the 400+ natural gas fueling stations owned, operated, maintained and/or supplied by Clean Energy throughout the U.S. and Canada, those issues are being addressed. “Together with GE Capital, we’re breaking down the barriers to entry that may have prevented some fleet owners from making the transition to natural gas,” said Andrew J. Littlefair, president and CEO of Clean Energy. “Our goal is to work with fleet operators to achieve a one-year payback on the incremental cost of natural gas heavy-duty trucks — and our alliance with GE Capital is another tool in achieving this important goal.” Today’s announcement expands the existing relationship between Clean Energy and GE Capital by building on two previous agreements between the companies to develop the nation’s natural gas fueling infrastructure.