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Automotive Natural Gas Vehicle Market Size, Share & Industry Analysis, By Fuel Type (Compressed Natural Gas (CNG), Liquified Petroleum Gas (LPG)), By Vehicle Type (Passenger Car, Commercial Vehicle) And Regional Forecast, 2024-2032

Region :Global | Report ID: FBI105492 | Status : Ongoing



A natural gas-powered vehicle (NGV) is powered by alternative fuels like LPG (Liquified petrol gas) and CNG (Compressed natural gas). The combustion of oxygen (O2) and methane (CH4) into water (H2O) and carbon dioxide (CO2) powers the engine of NGV’s. NGV’s are being promoted as low-cost alternative fuel vehicles since they produce fewer greenhouse gases than conventional fossil fuels based vehicles.

The market of Natural gas-powered vehicles is steadily growing and is expected to grow further. This can be attributed to the prices of CNG and LPG, which are comparatively less than diesel. Also, due to stunted emissions, natural gas will emerge out as the leading player in the alternative fuel market worldwide. The increasing demand for alternative fuel in the transportation sector is attributed to the private players increasing the use of natural gas vehicles in their operations.

However, the economies worldwide have been hit hard by the COVID-19 pandemic, which has adversely affected automotive and commercial vehicle production.

The growing influence of electric vehicles, especially in the Europe and Asia-Pacific region, is hampering the expansion of the automotive natural gas vehicle market. Low operational and maintenance costs of electric vehicles contribute to shifting the consumer focus from natural gas-powered vehicles to electric vehicles. Hence this is one of the key restraining factors of the market.

Key Market Driver -

Stringent emission norms due to environmental concerns are fueling factors for deep penetration in the fuel market, the oil market is experiencing economical turmoil leading to volatility in crude oil prices and in such scenario low cost of natural gas is a fueling factor for the expansion of this market.

Key Market Restraint -

The aftermath of COVID-19 has left the automobile and commercial vehicle market disrupted owing to the rattled supply chains and reduced productions due to logistical issues, also consumer priority is shifting towards electric vehicles due to their low operational and maintenance cost. These are some of the restraining factors for the market.

Market Segmentation:

The Automotive Natural Gas Vehicle market is segmented by fuel type (CNG and LPG), by vehicle type (Passenger and commercial), and by geography.

By fuel type, the market is segmented into CNG and LPG. CNG held the largest share of the market in 2020. The non-toxic nature of this fuel acts as a catalyst in its promotion as a Clean Energy. The expansion of the CNG market can be attributed to the stringent emission norms being implemented by various countries to curb emissions of vehicles owing to environmental concerns. The LPG segment is expected to exhibit a higher CAGR during the forecast period, owing to governments incentivizing it under federal policy support. The road transport industry, which includes the goods & carrier commute and the public commute, is a major contributor to the widespread adoption of LPG-based vehicles.

By vehicle type, the market is segmented into natural gas-powered passenger cars and commercial vehicles. The passenger car segment dominated the market in 2020. Due to the depreciating air quality and environment, consumers are inclined to adopt low greenhouse gas emitting fuels like CNG & LPG. Economically, CNG cars provide significant savings as it is 50% more cost-effective than gasoline and 40% more cost-effective than diesel. These factors are propelling the growth of this segment.               

Key Players:  

Major players operating in the global automotive natural gas vehicle market are Dong-Feng group company limited (China), AB Volvo (Sweden), Daimler AG (Germany), CNH Industrial NV (Netherland), and Tata Motors (India), among others.

Key Insights

  • New Advancements in Automotive Natural Gas Vehicle Market

  • Number of Products, Key Countries, 2020

  • New Product Launches, Key Players

Regional Analysis:

Geographically, the automotive natural gas vehicle market is segmented into North America, Europe, Asia Pacific, and the rest of the world.

Asia Pacific is expected to exhibit a higher CAGR during the forecast period due to increased manufacturing and sales of passenger cars in this region. In countries such as India, the Ministry of Petroleum and Natural Gas is encouraging the adoption of natural gas by drafting the city gas distribution policy (CGD). Under this scheme, the government is boosting natural gas infrastructure across the country. Some cities have even started converting their city buses from diesel engines to natural gas-powered engines.

North America is expected to show steady growth during the forecast period. This can be attributed to the exponential increase in the adoption of NGV by fleet operators.

Europe, on the contrary, is witnessing slower growth, which can be attributed to the fact that except Italy, no major European country is keen on developing the natural gas fueling infrastructure. Also, European countries are more focused on producing and selling hybrid and electric vehicles rather than natural gas-powered vehicles, which is hampering the expansion of this market.

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By Fuel Type

  • Compressed Natural Gas (CNG)

  • Liquified Petroleum Gas (LPG)

By Vehicle Type

  • Passenger Car

  • Commercial Vehicle

By Geography

  • North America (USA, Canada, and Mexico)

  • Europe (Germany, France, U.K., and Rest of Europe)

  • Asia Pacific (Japan, China, India, South Korea, and Rest of Asia Pacific)

  • Rest of the World

  • Ongoing
  • 2023
  • 2019-2022

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