Automotive Natural Gas Vehicle Market 2020 and Forecast 2021-2027

                                          
Report Overview: Automotive Natural Gas Vehicle Market


The global automotive natural gas vehicle market demand was valued at 28,201.3 thousand units in 2019 and looks set to grow at a compound annual growth rate (CAGR) of 2.4% from 2021 to 2027. The transportation sector across the world is adopting natural gas for vehicles. Incumbents of the industry have realized that conventional fuels, such as diesel and gasoline, are causing pollution and emitting greenhouse gas emissions on a large scale.

The infusion of advanced technologies in the engines is turning out to be of paramount importance to reduce emissions. These technologies might include the use of alternative fuels, such as CNG, LNG, hydrogen, and electricity. The need for alternative fuel technology in the transportation sector is prompting the incumbents to adopt LNG trucks for their operations. Subsequently, the automotive LNG vehicle segment is expected to grow in line with the rising interest from the trucking and transportation industry.


The disruptive and unstable pricing structure associated with diesel and gasoline is one of the prominent reasons that are propelling the adoption of automotive natural gas vehicles (NGV). The oil and gas industry is witnessing economic fluctuations on account of various factors such as the changing demand and supply of oil, fluctuation in the strength of the U.S. dollar, and the growth of energy-intensive sectors, such as electricity, transportation, and manufacturing. These factors lead to the volatility of crude oil prices. Therefore, the automotive natural gas vehicle industry is anticipated to flourish considerably over the forecast period 2021-2027. The rise in the extraction of shale gas across the U.S. has increased the supply of natural gas. This significant increment is attributed to the rapid growth of unconventional gas sources and shales since 2008, along with the emerging advanced drilling technology such as fracking. As a result, natural gas prices have decreased since 2008 for both residential as well as commercial consumers.

Government regulations regarding greenhouse gas emissions and environmental protection across the globe are becoming more stringent. As a result, there is an increase in the adoption of natural gas for different applications across various industries. Authorities across the world are taking several measures to protect the environment and are launching different programs and initiatives. For instance, National Green Tribunal (India), Natural Gas STAR Program, and Methane Challenge Program by Environmental Protection Agency (U.S.), the European Green Vehicles Initiative (EGVI), National Climate Change Plan of the UAE 2017-2050, and the Sustainable and Livable Cities Initiative (SLCI) of China, India, and Brazil are encouraging the adoption of CNG and LNG in the automotive industry.

However, COVID-19 (Coronavirus disease) outbreak is expected to hamper the market for automotive natural gas vehicle to some extent as it is producing political, economic, and social disruptions in major industries. For instance, the U.S. automotive industry announced a total shutdown of all three Detroit vehicle manufacturing operations. Also, China experienced a drop of 80% in its auto sales in February 2020. Furthermore, large events, such as the Geneva Motor Show, have been canceled in fear of spreading the virus. Currently, the magnitude of these impacts is uncertain; as a result, companies are withdrawing their 2020 industrial and financial guidance. Fuel

Type Insights: Automotive Natural Gas Vehicle Market

The fuel type segment is classified into CNG and LNG. In 2019, CNG secured the largest volume share in the automotive natural gas vehicle industry owing to increasing government initiatives for environmental security. The nontoxic nature of CNG leads to lower environmental damage. Moreover, CNG fuel systems are designed to comply with Federal Motor Vehicle Safety Standards 303 and 304 (U.S.) that ensure the integrity of fuel systems in case of crashes.

The LNG segment is poised to register a higher CAGR in the market for automotive natural gas vehicle during the forecast period owing to the increasing use of LNG in the locomotive and aviation industries. For instance, the Florida East Coast Railway (FECR) of North America converted its locomotive fleet to LNG by modifying its GE ES44AC locomotives. However, the use of natural gas as a fuel for locomotives is still being examined by a few rail companies. Nevertheless, there is a growing potential for LNG as a fuel for locomotives, considering the research and development activities across the countries.

Vehicle Type Insights: Automotive Natural Gas Vehicle Market

Based on vehicle type, the automotive natural gas vehicle market has been segmented into passenger vehicles, light-duty and heavy-duty buses and trucks, and three-wheelers. The passenger vehicle segment held the largest volume share in the market for automotive natural gas vehicle in 2019. The air quality around the globe is worsening owing to the excess emission of pollutants and greenhouse gases generated through the burning of fossil fuels such as coal, diesel, and gasoline. As a result of the worsening weather and air quality in countries such as Iran, China, India, Pakistan, and Saudi Arabia, people are inclined towards adopting alternative sources of fuel and related technologies in their passenger vehicles.


Additionally, natural gases such as CNG and LNG are cost-efficient on account of their better fuel economy. For instance, according to data from the NGV Journal, CNG is around 50.0% more economical as compared to gasoline, and approximately 40.0% more economical as compared to diesel. This fact is one of the prominent factors encouraging people to use natural gas in their automotive vehicles. Furthermore, the three-wheelers vehicle type segment has held a significant market share in Asian countries such as Thailand, India, and Bangladesh owing to the higher number of three-wheelers that run on natural gas in circulation.

Regional Insights: Automotive Natural Gas Vehicle Market

In Asia Pacific, the market for automotive natural gas vehicle accounted for the largest share in 2019, owing to increasing advancements in the development of CNG vehicles. The Asia Pacific is expected to emerge as the largest adopter of automotive natural gas vehicles on account of natural gas infrastructure development in countries such as China, India, and Pakistan. Additionally, stringent governmental policies regarding the environment are also expected to increase the growth of the market for automotive natural gas vehicle in the region. For instance, the National Energy and Policy Office (NEPO) of Thailand, along with PTT Public Company Limited, is giving financial support for CNG vehicle owners, such as loans with long-term repayment and low-interest rates for tax conversions. Additionally, the abovementioned entities provided grants to the Bangkok Mass Transit Authority (BMTA) to purchase automotive natural gas vehicles.

However, the growing interest in electric vehicles and the stagnant infrastructural growth for automotive natural gas vehicles are the factors posing a challenge for the growth of the market for automotive natural gas vehicle over the forecast period. Furthermore, COVID - 19 outbreak has disrupted the energy and automotive industry worldwide. For instance, according to Sublime China Information (SCI99), the demand for natural gas in China is expected to be 10bn m3 less in the year 2020 than earlier. Also, the automotive industry in China experienced a drop of nearly 80.0% in its sales in February 2020.

Key Companies & Market Share Insights: Automotive Natural Gas Vehicle Market

Vendors in the market for automotive natural gas vehicle are focusing on increasing the customer base to gain a competitive edge in the industry. Therefore, vendors are taking several strategic initiatives, such as collaborations, acquisitions and mergers, and partnerships with other key players in the market for automotive natural gas vehicle. For instance, in April 2019, Quantum Fuel Systems LLC partnered with the Quantitative BioSciences, Inc., which provides biosensing applications by combining customized cell measurement technologies and synthetic biology with a suite of computational tools. This partnership was anticipated to develop a biofuels production facility for purification and compression of biomethane from anaerobic digesters into vehicle fuel. For another instance, in June 2019, Cummins, Inc. completed the acquisition of Hydrogenics, a fuel cell systems provider in Canada. The company is anticipated to expand its power solutions portfolio by researching on hydrogen fuel cells to power commercial vehicle applications. Also, in May 2018, Westport Fuel Systems entered into an agreement to sell its CNG compressor business based in Italy to Snam SPA of Italy. The agreement was aimed to strengthen Westport Fuel Systems’ growing focus on its core business of alternative fuel systems and vehicle components. Some of the prominent players in the automotive natural gas vehicle (NGV) market include:

Key companies Profiled: Automotive Natural Gas Vehicle Market Report

 	
Agility Fuel Solutions
 	
AB Volvo
 	
Beiqi Foton Motor Co., Ltd.
 	
CNH Industrial N.V.
 	
 Clean Energy Fuels
 	
Cummins, Inc.
 	
PACCAR, Inc.
 	
Navistar, Inc.
 	
Quantum Fuel Systems LLC
 	
Westport Fuel Systems Inc.

This report forecasts volume growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2027. For this study, Trusted Business Insights has segmented the global automotive natural gas vehicle market report based on fuel type, vehicle type, and region.

Fuel Type Outlook (Volume, Thousand Units, 2016 - 2027)

 	
CNG
 	
LNG

Vehicle Type Outlook (Volume, Thousand Units, 2016 - 2027)

 	
Passenger Vehicles
 	
Light-duty & Heavy-duty Buses and Trucks
 	
Three-wheelers