Automotive Natural Gas Vehicle Market Size, Share & Trends Report

Automotive Natural Gas Vehicle Market Size, Share & Trends Analysis Report By Fuel Type (CNG, LNG), By Vehicle Type (Passenger, Light-duty & Heavy-duty Buses & Trucks), By Region, And Segment Forecasts, 2021 - 2028

  • Published Date: Apr, 2021
  • Base Year for Estimate: 2020
  • Report ID: GVR-2-68038-567-0
  • Format: Electronic (PDF)
  • Historical Data: 2016 - 2019
  • Number of Pages: 110

Report Overview

The global automotive natural gas vehicle market demand was valued at 29,793.76 thousand units in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 3.3% from 2021 to 2028. Natural gas is gaining popularity across the world as an alternative fuel owing to easy availability, lower vehicular emissions, and lower costs compared to conventional fuels, such as gasoline and diesel. The growing need for alternative fuel solutions in the transportation sector is encouraging the players in the transportation industry to adopt Liquefied Natural Gas (LNG) trucks to run their operations. Subsequently, the demand for LNG vehicles is increasing in the transportation industry. Moreover, the growing government initiatives for the development of natural gas distribution infrastructure are expected to boost the demand for natural gas vehicles (NGVs) over the forecasted period.

U.S. automotive NGV market demand, by fuel type, 2018 - 2028 (Thousand Units)

The unstable and disruptive pricing structure associated with gasoline and diesel is one of the prominent factors driving the adoption of NGVs. The oil & gas industry is witnessing economic instabilities on account of various factors, such as the fluctuation in the strength of the U.S. dollar, changing demand and supply of oil, and the growth of energy-intensive sectors, such as transportation, electricity, and manufacturing. These factors are expected to lead to the volatility of crude oil prices. Therefore, the automotive NGV industry is anticipated to grow considerably over the forecast period. The rise in the extraction of shale gas across the U.S. has increased the supply of natural gas. This significant increment can be attributed to the rapid growth of unconventional gas sources and shales since 2008, coupled with evolving advanced drilling technologies, such as fracking. As a result, natural gas prices have decreased since 2008 for both commercial and residential consumers.

Government regulations pertaining to environmental protection and Greenhouse Gas (GHG) emissions worldwide are becoming more stringent. As a result, there is a rise in the adoption of natural gas for different applications across various industries. Throughout the world, government agencies and authorities are undertaking numerous measures to protect the environment and are rolling out multiple programs and initiatives. For instance, Natural Gas STAR Program and Methane Challenge Program by the Environmental Protection Agency (U.S.), the European Green Vehicles Initiative (EGVI), National Green Tribunal (India), 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 alternative fuels, such as Compressed Natural Gas (CNG) and LNG, in the automotive sector.  

However, the economy worldwide has experienced a massive setback due to the COVID-19 pandemic, negatively impacting automotive production. The pandemic is expected to hamper the market growth to some extent as it is creating political, economic, and social disruptions in significant industries. The aftermath of the pandemic has resulted in supply chain disruptions, with several production facilities coming to a halt. The outbreak has negatively affected the sales of passenger and commercial automobiles, subsequently impacting the demand for NGVs in the automotive sector. According to the German Association of the Automotive Industry (VDA), in Europe, 5.1 million passenger cars were registered in the first half of 2020, which is 39% less compared to 2019. Moreover, the sales of passenger cars in the U.S. reduced by around 26% in 2020 compared to the previous year. Furthermore, China experienced a drop of 80% in its auto sales in February 2020.

Fuel Type Insights

The CNG segment accounted for the largest volume share of over 95% in 2020 and will expand further at a steady CAGR from 2021 to 2028. The growth of the CNG segment can be attributed to the increasing number of government initiatives to curb the increasing vehicular emissions and environmental security. The nontoxic nature of CNG leads to lower environmental damage. Moreover, CNG fuel systems are designed to comply with the Federal Motor Vehicle Safety Standards 303 and 304 (U.S.), which ensure the specific requirements for fuel systems' integrity using CNG fuel systems of dedicated CNG and dual-fuel CNG automobiles.

The LNG segment is projected to register the fastest CAGR from 2021 to 2028. The segment is majorly incentivized by government policy support, diesel-LNG price differential, and developing logistics industry driven by more robust economic growth. The road transportation industry is the key contributor to LNG adoption. In terms of LNG vehicles, the adoption of LNG Heavy-Duty Trucks (HDT) is higher. LNG has growth potential as a fuel for automotive, considering the research & development activities across various countries.

Vehicle Type Insights

The passenger vehicle type segment accounted for the largest volume share of over 87% in 2020. The air quality worldwide is worsening due to the excess emission of pollutants and GHG generated through the burning of fossil fuels, such as coal, gasoline, and diesel. As a result of the worsening environment and air quality in countries, such as China, India, Saudi Arabia, Iran, and Pakistan, people are inclined toward adopting alternative sources of fuel and related technologies.

Global automotive NGV market share, by vehicle type, 2020 (%)

In addition, natural gases, such as CNG and LNG, are cost-efficient on account of their better fuel economy. For instance, according to the data from NGVJournal, CNG is around 50% more economical as compared to gasoline and approximately 40% more economical compared to diesel. This is one of the prominent factors encouraging people to use natural gas in their vehicles. The three-wheelers segment accounted for 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

The Asia Pacific region accounted for the largest share of more than 53% in 2020 and is anticipated to continue to lead the global market, registering a significant CAGR over the forecast period. This growth can be attributed to increased production and sales of passenger cars in the region. China accounted for around 50% of the passenger car sales in APAC. The region is the largest adopter of NGVs on account of natural gas infrastructure development in countries, such as India, China, and Pakistan. For instance, in India, the Ministry of Petroleum and Natural Gas drafted the City Gas Distribution (CGD) policy. Under the policy, the government would be expanding the CNG infrastructure across the country. However, the growing interest in Electric Vehicles (EVs) and the stagnant infrastructural growth of NGVs are the factors posing a challenge for the market growth. Furthermore, the pandemic has disrupted the energy and auto industries worldwide.

Key Companies & Market Share Insights

The companies in the market are focusing on increasing the customer base to gain a competitive edge. They are stressing on providing technologically driven and advanced products to enhance their product offerings in the market.  The companies are also undertaking strategic initiatives, such as regional expansions, acquisitions, mergers, partnerships, and collaborations, to grow in the market.

Moreover, these players are consolidating their market shares by undertaking M&A activities. For instance, in February 2021, Agility Fuel Solutions announced a merger with Hexagon Mobile Pipeline to strengthen its position in the list of natural gas and renewable natural gas mobility solution providers. In September 2020, Westport Fuel Systems Inc. announced a definitive agreement with UNO MINDA Group, its joint venture partner. The agreement enabled the company to better serve the growing Indian NGV market. Some of the prominent players in the global automotive natural gas vehicle (NGV) market include:

  • 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.

Automotive Natural Gas Vehicle Market Report Scope

Report Attribute

Details

Market volume in 2021

30,994.45 thousand units

Volume forecast in 2028

38,856.33 thousand units

Growth rate

CAGR of 3.3% from 2021 to 2028

Base year for estimation

2020

Historical data

2016 - 2019

Forecast period

2021 - 2028

Quantitative units

Volume in Thousand Units and CAGR from 2021 to 2028

Report coverage

Volume forecast, company share, competitive landscape, growth factors, and trends

Segments covered

Fuel type, vehicle type, region

Regional scope

North America; Europe; Asia Pacific; Latin America; Middle East & Africa

Country scope

U.S.; Canada; Russia; Germany; France; Sweden; China; India; Bangladesh; Thailand; Brazil; Mexico

Key companies profiled

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.

Customization scope

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Segments Covered in the Report

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 2028. For the purpose of this study, Grand View Research has segmented the global automotive natural gas vehicle market report on the basis of fuel type, vehicle type, and region:

  • Fuel Type Outlook (Volume, Thousand Units, 2016 - 2028)

    • CNG

    • LNG

  • Vehicle Type Outlook (Volume, Thousand Units, 2016 - 2028)

    • Passenger Vehicles

    • Light-duty & Heavy-duty Buses and Trucks

    • Three-wheelers

  • Regional Outlook (Volume, Thousand Units, 2016 - 2028)

    • North America

      • U.S.

      • Canada

    • Europe

      • Germany

      • Russia

      • France

      • Sweden

    • Asia Pacific

      • China

      • India

      • Bangladesh

      • Thailand

    • Latin America

      • Brazil

      • Mexico

    • Middle East & Africa

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