Things to Consider in a Natural Gas Pickup Truck
Pam is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
If you drive a heavy-duty pickup truck and are tired of paying over $100 to gas up, you might consider one of the new natural gas (CNG) models being offered this year.
Before we go any further, you should know that using CNG instead of gasoline will not improve your gas/fuel mileage. If you are getting 10 mpg on gasoline now, you will get 10 miles per Gasoline Gallon Equivalent (GGE) on CNG. Your savings will come from the difference in price for a GGE of CNG vs. a gallon of gasoline, currently around $2 and various state and private incentives, depending on where you live (more about that later).
Ford began delivering their F-250s and F-350s over two weeks ago and as of last week, have already sold over 150. If you ordered a Ford truck today, the wait time would be about eight weeks. GM started taking orders for their Chevrolet Silverado 2500 and GMC Sierra 2500 HD pickups (the CNG option is not available on their 3500 series pickups) on April 19, with deliveries expected before the end of this year.
Ford has partnered with Westport Innovations Inc. (NASDAQ: WPRT) to provide the CNG technology. They are offering two CNG tank sizes: 18.4 GGE and 24.5 GGE, plus the standard sized gasoline tank that comes with the particular truck configuration you choose, which varies from 26 to 37.5 gals. The cost of the CNG option is $9,750 for the smaller tank and $10,950 for the larger one.
GM's CNG option, according to FoxNews.com, will cost $11,000. However, I haven't seen any mention of the CNG tank size. GM is partnering with IMPCO, a subsidiary of Fuel Systems Solutions (NASDAQ: FSYS).
Enough of this, what's the payback time? Glad you asked. Assuming 10 mpg (what we get on our HD pickup with no payload) and a $2 difference between the price of CNG and gasoline, you would have to consume 4,875 ($9,750/$2) GGEs of CNG or 5,475 GGEs of CNG, to break even on the small or the large tanks, respectively. At 10 mpg, that would take you 48,750 miles or 54,750 miles, for the small or the large tanks, respectively. Only you know how many miles you drive per year and, therefore, how long it will take you to break even. But, if you drive the standard 12,000 miles/year, the payback time would be either about 4 years and 1 month or 4 years, 7 months. After that, assuming the same $2/gallon difference in fuel costs, you would save $200/month, every month you continued to own your truck. If you typically buy a new truck at 100,000 miles, you're looking at savings of over $4,500 (for the large tank) to $5,100 (for the small tank) in lower fuel costs.
The nice thing, in a way, is that the worse your mileage, the faster you pay off the CNG option. Of course, the more you drive, the quicker the payback time.
Many states and private companies offer incentives for driving Alternative Fuel Vehicles (AFVs), ranging from income tax credits, vehicle rebates, lower registration fees, sales tax exemptions on the CNG equipment cost and insurance discounts, to High Occupancy Vehicle (HOV) lane privileges, etc. To see what your state offers, go to www.cngnow.com or www.afdc.energy.gov.
How does it drive? I was lucky enough to test drive a Ford F-250 Lariat on May 23 during Westport's Road Trip to NYC. Acceleration was better than our F-250 XLT. In addition, the engine was much quieter and the ride was superb, like driving an upscale passenger car. The Westport representative who accompanied us on the test drive volunteered that there is no loss of payload or towing capacity. However, the CNG tank in both the Ford and the GM models occupies about 2 feet of bed space, so hauling plywood or drywall will require you to leave the tailgate down and secure the load.
Fill 'er Up
Finally, the big question—what about refueling? According to the U.S. Department of Energy, as of May 11, there are 1,014 CNG filling stations, both public and private, in the U.S. About half of these are open to the public. Filling station locations can be found at either of the above links, but www.cngnow.com provides current prices (which can vary greatly) as well as trip planning facilities. If you have access to natural gas in your home, you can refill your vehicle there overnight. Some states provide rebates on home refueling equipment and some utilities offer discounts on natural gas used in CNG vehicles and on the electricity you use to run the pump.
So, before you make a decision about whether or not to buy a CNG pickup this year, do your homework. Take advantage of information provided by www.cngnow.com and www.afdc.energy.gov. Westport Innovations offers a payback calculator on their website which you can use to figure your own payback period — just be sure to read the instructions first: http://www.wingpowersystem.com/natural-gas/payback-calculator.
p366 owns shares of Westport Innovations. The Motley Fool owns shares of Ford and Westport Innovations. Motley Fool newsletter services recommend Ford, General Motors Company, 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. If you have questions about this post or the Fool’s blog network, click here for information.