|Cumulative natural gas vehicles in use by segment, world markets: 2013-2020. Source: Navigant Research. Click to enlarge.|
In a new report, Navigant Research forecasts that the number of natural gas vehicles (NGVs) on roads worldwide will reach 34.9 million by 2020. The increase is largely driven due to a combination of low-cost natural gas and sustained higher prices for gasoline and diesel in many countries, Navigant suggests.
Natural gas is about 41% the cost of gasoline, Navigant says, noting that compressed natural gas (CNG) equipment adds between 10% to 40% to the cost of the vehicle due to the CNG cylinders and engine equipment, while liquefied natural gas (LNG) adds 60% to 80% due to the more expensive storage tanks. The differential in the cost of the fuels determines the payback on this additional equipment (currently between 2.5 and 6 years, depending on the vehicle).
Other factors, such as increased vehicle availability, a shortage of oil refining capabilities, tightening emissions restrictions, and increased energy security, are also fueling growth within specific countries.
Light duty vehicles (LDVs) account for almost 95% of NGVs on roads today, but trucks and buses are growing at a faster rate and are anticipated to account for 9% of the total fleet by 2020.
Asia Pacific leads in terms of annual sales of NGVs, with 1.2 million sales expected in 2013. While China and Pakistan are the largest markets, Thailand and India are the fastest growing with compound annual growth rates of 18% and 12%, respectively, between 2013 and 2020. The combination of availability of inexpensive CNG, vehicle availability, and strong government support are contributing to growth in these countries, Navigant says.
North America is the fastest growing region with 17% CAGR anticipated. NGV passenger cars are growing at the slowest rate (14% CAGR) due to the limited availability of both vehicles and refueling infrastructure; meanwhile, buses and medium/heavy duty trucks are growing at the fastest rates (22% and 19% CAGR, respectively).
Italy and Ukraine, the largest markets, are slowest growing (3% and 4% CAGR, respectively) due to their relative maturity. Germany is growing rapidly (30% CAGR), and Navigant expects NGV sales in the country to climb from 7,331 in 2013 to 46,275 in 2020 due in large part to increased availability of refueling stations (surpassing 1,000 stations in 2018).
LNG trucks are also seeing significant—although geographically limited—growth. Asia Pacific is the largest market for LNG trucks; Navigant forecasts a CAGR of 25%, reaching 11,245 units. North America, led by the United States, is also seeing significant interest in LNG trucks and is expected to reach 4,128 sales in 2020, making it the second largest market. New LNG infrastructure is helping to promote the truck market in both North America and Asia Pacific.