Note: This entry is not the detailed Instablog to which my article on APG refers. To view that, scroll down to the last / least recent Instablog entry, below.
It's official…EcoDual is Eco-Done, further thinning the vehicular dual-fuel field and leaving a now larger market share that APG will gobble up. In stock talks in the last few weeks I've shared my suspicions about this, but was unable to get the level of verification I like to have in my due diligence.
It all started with some comments I picked up from some supplier contacts I have in this field that reportedly EcoDual wasn't paying its bills. Then, from another trade association contact I heard that an EcoDual employee was approached about speaking in regard to dual fuel at an upcoming conference, and that instead of accepting, they suggested that a good speaker would be APG's CEO Lyle Jensen. What? Naturally, the person would ask why, and the response reportedly indicated either that that employee didn't expect to be with EcoDual much longer, or that EcoDual itself wouldn't be much longer. It turns out both are now the case.
So, with due diligence that can hardly be described as rocket surgery (lol) I contacted the company's 800 number….no longer operating. Then I tried their local landline…disconnected. Then I noticed on their Facebook page and Twitter account that despite regular entries in the past, all activity had stopped in December and November, respectively. Then, I contacted someone with the company on their cell and not only did the phone not accept messages any more, but the greeting was different in that it did not mention EcoDual at all, as it did in the past. I then spoke with the kind folks at the Beaufort, South Carolina Chamber of Commerce, and they had no working numbers, said that no one from EcoDual had told them anything, and that they were getting calls from multiple entities about it. (I'm assuming that would include some of EcoDual's private investors, vendors they owe money, and their few customers, such as Rayl, and Smith Dairy.)
There was a euphemism out there for a few weeks that they were calling this "a pause" while awaiting a possible investment, but as of this morning, I have it on 100% solid source that EcoDual ran out of development funds and is out of business. Their assets are likely up for grabs, and I am confident there will be no one interested in grabbing them. Look what happened when CHK tried to sell off their Peake dual fuel assets that were very much like EcoDual's….no one bought it.
In my original estimations of the market share for heavy duty vehicular dual fuel, I had first estimated APG as the leader, then Peake, then EcoDual, then Clean Air Power, then some other smaller entries. Peake's dual fuel program is defunct; EcoDual is now gone, foreign company Clean Air Power had to go back to the drawing board and is just now starting to try to get back into the dual fuel realm, and is not focusing on retrofits, and Westport has let dual-fuel (foolishly) take a back burner to their dedicated natural gas development programs (which have had troubles, as noted), and differences between "bi-fuel" and actual dual-fuel, plus the gap they just left by cancelling their 15 liter natural gas engine program all give huge advantages to APG. This was confirmed in the latest APG earnings call, when the company stated they had seen a flurry of interest from those heavy duty and long haul operations who need exactly what APG has to offer.
So, I now predict that the heavy duty vehicular dual fuel market share will be an insurmountable 65% American Power Group (OTCQB:APGI), about 25% Clean Air Power, about 8% WPRT over time if Westport comes up with a workable heavy duty true dual fuel solution, and the remaining tidbits to some smaller dogs out there nipping at the feet.
You do the math of what the sales will be for APGI. When I did, I decided to increase my position in APGI by 30%. APG is simply the undisputed, unrivaled, perfectly-positioned, exponentially-better nationwide support and sales-network bolstered company...and it's the only American company. Dual fuel, in fact, APG's specifically, IS the bridge across which trucks will drive for years and years to come as the natural gas infrastructure builds. Until then, dedicated natural gas will not be a viable, logical, affordable, or wise choice for most cartage operations and fleets. In the meantime, APG will ride an 8 to 20 year benevolent and lucrative tsunami of dual fuel's golden age.
Editor Rich Pielisch of Fleets and Fuels, confirmed this in his article out today, including quotes from EcoDual's CFO, and confirmation that their CEO and #2 Executive have left the company. Link is here: www.fleetsandfuels.com/fuels/ngvs/2014/0...
As well as some Odaatious commentary as to why APG will be dominant over the only real remaining dual-fuel heavy duty vehicular competitor, foreign company Clean Air Power.
Disclosure: I am long APGI.