American Power Group Corporation’s subsidiary, American Power Group, Inc. (APG) will be expanding its existing in-house and WheelTime Network sales and marketing resources with new direct sales representatives, additional third party dealers and co-marketing relationships with numerous national and regional CNG and LNG fueling suppliers.
Lyle Jensen, American Power Group’s CEO, stated, “As we reviewed the early-adopter and follow-on purchasing patterns of fiscal 2014, we have determined that additional sales channels are required to increase lead generation in this evolving alternative fuel market. Heavy duty truck fleets are a “show-me” industry and so the more leads we generate, the more early-adopter orders can be booked leading to expansion into higher follow-on production quantities. We now have fleets that started with a few early-adopter conversions that have grown to 30-40 dual fuel trucks in their fleet which represents a 20% to 40% market penetration of those customers that have tried our dual fuel technology.”
Jensen explains that almost 500 heavy duty vehicles worldwide running APG’s dual fuel solution and an estimated 50+ million accumulated on-road miles builds operational and economic creditability in the market, generating an increase in fueling supplier generated leads and quotation activity.
Mr. Jensen added, “With the dedicated natural gas engine suppliers either delaying or abandoning development of a natural gas engine above 400 horsepower, there is a large heavy-duty truck market gap that presents a significant opportunity for us. APG’s dual fuel solution is being installed on 400+ horsepower engines which typically consume 15,000 to 20,000 gallons of diesel fuel on an annual basis. By displacing between 8,000 to 12,000 annual gallons of diesel per vehicle with natural gas and having the ability to convert up to 6 existing vehicles to dual fuel for roughly the same price as one new heavy duty dedicated Class 8 truck, we provide the fuel supplier marketing teams with a very compelling economic argument for converting to dual fuel.”
Mr. Jensen concluded, “Despite the recent drop in oil prices, APG is positioned to leverage several compelling trends in the on-road and off-road dual fuel high horsepower markets with its universal design and agnostic use of the various forms of natural gas. For example, due to expanding emission restrictions, there is an abundance of flared and well-head gas that needs to be conditioned and utilized. Over 65% of APG’s current oil and gas dual fuel conversions operate on conditioned field gas that is at a fraction of the cost compared to a public natural gas pump price. Because our heavy-duty dual fuel truck market consumes significant amounts of fuel annually per vehicle compared to light-duty and medium-duty vehicles, many of our customers are able to attract volume discount pricing that is well below the public pump price. Additionally, many of our largest dual fuel fleets have installed their own inside-the-fence fueling stations connected directly to the U.S.’s extensive natural gas pipeline infrastructure which again is at a fraction of the cost of the public pump price. APG’s dual fuel solution of utilizing lower diesel prices combined with even lower natural gas prices positions us well despite whatever fueling market fluctuations we may encounter.”
Mike Delaney, WheelTime’s President and CEO, stated, “An abundance of domestic natural gas continues to maintain the pricing advantage of natural gas versus diesel and many new station openings make it vastly more accessible than it has been in the last few years”. Mr. Delaney added, “Early adopter evaluation feedback and re-orders from existing APG customers are getting a lot of attention these days and we are currently seeing an unprecedented number of new inquiries.”