Natural Gas Vehicles Market 2023 Industry Trends, Future Demands, Growth Factors, Emerging Technologies

The global natural gas vehicle market size was valued at US$ 12.7 billion in 2021, and anticipated to grow at a CAGR of 6.8% over the forecast period. Natural gas vehicles (NGVs) can offer comparable fuel range support for applications that stay within a region supported by reliable CNG fuelling, making them attractive choices for high-mileage, centrally fuelled fleets. Liquefied natural gas (LNG) delivers a higher energy density than compressed natural gas (CNG), resulting in a fuel range that is more comparable to regular fuel for vehicles that travel long distances. Natural gas has several benefits over conventional gasoline and diesel fuels, including domestic availability, vast distribution infrastructure, and lower greenhouse gas emissions.

In accordance with the Energy Policy Act of 1992, CNG and LNG are regarded as alternative fuels. NGVs have equal horsepower, acceleration, and cruise speeds as equivalent to conventionally fuelled vehicles. Beyond reducing greenhouse gas emissions, NGVs also improve air quality compared to conventional diesel and gasoline vehicles.

Government regulations regarding environment protection and greenhouse gas (GHG) emissions are becoming stricter on a global scale. As a result, natural gas is increasingly being used in a variety of applications across numerous industries. Governmental organisations and authorities all over the world are implementing several initiatives and programs to protect the environment. For instance, The European Green Vehicles Initiative (EGVI), National Green Tribunal (India), National Climate Change Plan of the UAE 2017-2050, Natural Gas STAR Program and Methane Challenge Program by the Environmental Protection Agency (U.S.), and the Sustainable and Livable Cities Initiative (SLCI) of China, India, and Brazil are all promoting the use of alternative fuels, such as compressed natural gas (CNG) and LNG, in the automotive industry.

The automobile and commercial vehicle markets have been impacted as a result of COVID-19 due to shattered supply chains, lower output as a result of logistical challenges, and a shift in consumer preference towards electric vehicles due to their low operating and maintenance costs. These are a few of the variables that could limit market expansion over the anticipated time frame.

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Type Insights

By type, the global natural gas vehicle market is classified into CNG, and LPG. The CNG segment accounted for the largest share in 2021 and will further expand at a steady CAGR during the projected period. The rise in government measures aimed at lowering rising vehicle emissions and environment security is responsible driving the growth of CNG market. As CNG is nontoxic, lower environmental damage occurs. Additionally, CNG fuel systems are made to adhere to the Federal Motor Vehicle Safety Standards 303 and 304 (U.S.), which guarantee the specific needs for fuel system integrity while using CNG fuel systems in dedicated CNG and dual-fuel CNG vehicles.

Due to government policy support, the price differential between diesel and LNG, and the growing logistics sector supported by stronger economic growth, the LNG segment is anticipated to increase at a greater CAGR during the projected period. The main force behind the deployment of LNG is the road transportation sector. LNG has a higher energy density than CNG since it is kept as a liquid, allowing for more fuel to be stored onboard a vehicle. As a result, LNG is an excellent option for Class 7 and 8 trucks that need a longer range.

Vehicle Type Insights

In terms of vehicle type, the global natural gas vehicle market is segmented into passenger vehicles, and commercial. The passenger car segment dominated the market in 2021. Consumers are inclining to choose low-greenhouse gas producing fuels like CNG & LPG due to the declining air quality and environment. Since CNG is 50% more economical than gasoline and 40% more economical than diesel, CNG cars offer significant financial savings. These factors are fostering the expansion of this market segment.

Sales Channel Insights

In terms of sales channel, the market is segmented into OEM and Retrofitting. Both qualified system retrofitters and original equipment manufacturers sell medium- and heavy-duty NGVs. Many automobiles can be converted to run on natural gas in an affordable, secure, and reliable manner by qualified system retrofitters using aftermarket conversion systems.

Regional Insights

In terms of region,  Asia Pacific region accounted for the largest share in 2021 and is anticipated to continue to lead the global market over the forecast period. Increased manufacture and sales of passenger cars in the region can be attributed for this expansion. The growth of the natural gas infrastructure in nations like India, China, and Pakistan has made the region the greatest adopter of NGVs. Further, rising awareness among customers, stringent emission norms implemented by governing bodies, and increasing fuel prices are driving the demand for alternative fuel-powered vehicles. For instance, In India CNG vehicles recorded sales of 1,63,696 units in 2021, up from 41,572 units in 2020.

Furthermore, North America is expected to grow at a steady CAGR during the forecast period. The growth in the region can be attributed due to the exponential surge in the adoption of NGV by fleet operators. For instance, in September 2021, a group of 21 state attorney's general, the District of Columbia, and numerous large U.S. cities encouraged the United States government to implement strict auto emission laws.

Key Companies Insights

Some of the major companies studied under the market scope are as follows: AB Volvo, Beiqi Foton Motor Co. Ltd., CNH Industrial NV, Daimler AG, Westport Innovations Inc., Dongfeng Motor Group Company Limited, Clean Energy Fuels Corp., Clean Air Power Ltd., Agility Fuel Systems Inc., Landi Renzo SPA, and Others. Major players operating in the ecosystem experiences strong competition owing to the presence of large number of players on global and regional scale. Further, the various strategies are adopted by these players such as merger and acquisition, new product launch, geographic expansion, research & development for expanding their product portfolio, and others.

In 2021, To strengthen its standing among companies offering natural gas and renewable natural gas mobility solutions, Agility Fuel Systems announced a merger with Hexagon Mobile Pipeline.

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Segments

By Type

· Compressed Natural Gas (CNG)

· Liquefied Petroleum Gas (LPG)

By Vehicle Type

· Passenger Vehicles

· Commercial Vehicles

By Sales Channel

· OEM

· Retrofitting

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