Release Date: February 24, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: How are you looking at the clarifications under Section 45 and the OAL pause? A: Andrew Littlefair, CEO, explained that the OAL issue is technical and should be resolved soon, potentially bringing LCFS prices back to the 70s. Regarding Section 45, the current model limits credit value due to methane capture calculations. They believe the credit should be higher, reflecting the negative carbon intensity of their projects.
Q: Do you see any RNG volumes shifting from transportation to power generation for data centers? A: Andrew Littlefair, CEO, noted that while transportation remains the primary use for RNG, there is potential for data centers to use RNG due to its low carbon footprint. However, transportation is a hard-to-decarbonize sector, making RNG a valuable fuel choice there.
Q: Can you discuss volume growth in key sectors for Q4 and expectations for 2025? A: Robert Vreeland, CFO, stated that Q4 growth was driven by fleet and RNG transit customers. For 2025, they expect modest growth across sectors, with additional contributions from the X15 engine, although refuse sector growth may be muted due to market maturity.
Q: How do you see the 15L engine rollout impacting your existing station footprint? A: Andrew Littlefair, CEO, believes initial adoption will utilize the existing network, especially for smaller orders. As adoption grows, they anticipate building new stations for larger fleets like JB Hunt, but initial growth will leverage current infrastructure.
Q: How are you approaching project development beyond Moss given regulatory uncertainties? A: Andrew Littlefair, CEO, mentioned they are cautious about new greenfield projects due to regulatory uncertainties. They are focused on optimizing current projects and will consider new opportunities if they arise, but are not actively pursuing new developments.
Q: What are your thoughts on the timeline for fleet adoption of the 15L engine? A: Andrew Littlefair, CEO, expects fleets to start with smaller orders (50-100 units) before scaling up. This gradual adoption will allow time for infrastructure development and could lead to larger orders in the future as fleets gain confidence in the technology.
Q: Can you provide details on the unit economics for the X15 engine? A: Andrew Littlefair, CEO, explained that initial incremental pricing for the X15 engine was high, but they aim to reduce it to around $75,000. This pricing, combined with fuel savings, offers a two-year payback period, making it attractive for fleets.
Q: How are you handling the booking of the Section 45 credit? A: Robert Vreeland, CFO, stated they are waiting for more certainty and finalization of the credit before booking it. They are monitoring the situation closely and will adjust their approach as clarity improves.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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