The automotive natural gas vehicle market remains in its infant stage, despite sales growth in the last three to four years. The automotive natural gas vehicle market is expected to grow at a CAGR of 7% between 2022 and 2032.
The Automotive Natural Gas Vehicle (NGV) Market is a segment of the automotive industry that focuses on vehicles powered by compressed natural gas (CNG) or liquefied natural gas (LNG). NGVs use natural gas as a fuel source, offering potential benefits such as reduced emissions, cost savings, and energy security. Here’s an overview of the NGV market:
Market Overview: The Automotive NGV Market includes passenger cars, trucks, buses, and commercial vehicles that are equipped to run on natural gas. These vehicles are designed to use either compressed natural gas (CNG), stored at high pressure in tanks onboard the vehicle, or liquefied natural gas (LNG), which is stored in a cryogenic state at extremely low temperatures.
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Market Drivers:
Environmental Regulations: Stringent emissions regulations aimed at reducing greenhouse gas emissions and improving air quality are driving the adoption of NGVs as cleaner alternatives to traditional gasoline and diesel vehicles.
Cost Savings: Natural gas typically costs less than gasoline or diesel on a per-mile basis, making NGVs economically attractive for fleet operators and commercial vehicle owners seeking to reduce fuel costs and total cost of ownership.
Energy Security: Natural gas is abundant and domestically sourced in many regions, reducing dependence on imported petroleum and enhancing energy security for countries with significant natural gas reserves.
Key Players:
Automotive Manufacturers: Companies such as Honda, Toyota, Ford, General Motors, Volvo, and Fiat Chrysler Automobiles (FCA) produce NGVs for various markets worldwide, offering a range of passenger cars, trucks, and commercial vehicles powered by natural gas.
Natural Gas Suppliers: Natural gas producers, distributors, and fueling station operators play a crucial role in supporting the NGV market by providing access to compressed or liquefied natural gas fueling infrastructure.
Conversion Companies: Some companies specialize in retrofitting existing gasoline or diesel vehicles to run on natural gas, offering conversion kits and services to fleet operators and individual vehicle owners.
Market Trends:
Increased Adoption in Public Transportation: NGVs are widely used in public transportation fleets, including buses and taxis, where they offer economic and environmental benefits for high-mileage applications.
Expansion of Fueling Infrastructure: Growth in natural gas fueling infrastructure, including CNG and LNG fueling stations, supports the adoption of NGVs by providing convenient access to fuel for vehicle owners and operators.
Advancements in Engine Technology: Ongoing advancements in natural gas engine technology, including direct injection, turbocharging, and variable valve timing, improve performance, efficiency, and emissions control in NGVs.
Analyzing Demand for Automotive Natural Gas Vehicles from Asia Pacific
The Asia Pacific automotive natural gas vehicle market is expanding due to the province’s increased production and sales of passenger cars. Due to the development of natural gas infrastructure in countries, China is recognized as the largest adopter of NGVs.
China is expected to increase CNG and LNG usage due to massive infrastructure growth, and natural gas may help operators reduce operating costs. The government’s numerous incentives to encourage the use of natural gas serve as primary drivers of automotive natural gas vehicle market growth.
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Tracking the Consumption of Automotive Natural Gas Vehicles in United States
Natural gas is readily available in the United States, and the region is the world’s lowest-cost manufacturer. As a result, it opens up many automotive natural gas vehicle market growth opportunities. Furthermore, increased shale gas extraction across the United States has increased the natural gas supply.
Key Takeaways:
- The Asia Pacific region accounted for more than 55% of the automotive natural gas vehicle market and is expected to maintain its lead with a significant CAGR.
- China accounted for nearly a quarter of APAC passenger car sales.
- The European automotive natural gas vehicle market is expected to grow throughout the forecast period.
- Natural gas is abundant in the United States, and the country is the world’s lowest-cost producer.
Competitive Landscape:
Ford Motor Company, Hondo Motor Company, Volkswagen, and Hyundai Motor Corp are the key participants in the global demand for automotive natural gas vehicles.
Companies emphasize providing technologically driven and advanced products to enhance their market offerings. To expand in the automotive natural gas vehicle market, the companies are also pursuing strategic initiatives such as regional expansions, acquisitions, mergers, partnerships, and collaborations.
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Key Segments Covered in the Automotive Natural Gas Vehicles Market Report
Fuel Type:
- Compressed Natural Gas (CNG)
- Liquefied Natural Gas (LNG)
Vehicle Type:
- Passenger Vehicles
- Commercial Vehicles
Region:
- North America
- Latin America
- Western Europe
- Eastern Europe
- APEJ
- Japan
- Middle East & Africa
Author
Nikhil Kaitwade (Associate Vice President at Future Market Insights, Inc.) has over a decade of experience in market research and business consulting. He has successfully delivered 1500+ client assignments, predominantly in Automotive, Chemicals, Industrial Equipment, Oil & Gas, and Service industries.
His core competency circles around developing research methodology, creating a unique analysis framework, statistical data models for pricing analysis, competition mapping, and market feasibility analysis. His expertise also extends wide and beyond analysis, advising clients on identifying growth potential in established and niche market segments, investment/divestment decisions, and market entry decision-making.
Nikhil holds an MBA degree in Marketing and IT and a Graduate in Mechanical Engineering. Nikhil has authored several publications and quoted in journals like EMS Now, EPR Magazine, and EE Times.
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