|Cumulative light-duty NGV sales by segment. Source: Navigant. Click to enlarge.|
In a new report, Navigant Research forecasts that light-duty natural gas vehicle (LD NGV) sales will grow 119% between 2014 and 2024, culminating in 42.1 million NGVs on the world’s roads and accounting for 2.8% of all vehicles on the roads.
Overall, Navigant expects the worldwide market for LD NGVs to grow at a compound annual growth rate (CAGR) of 5.6% between 2014 and 2024, with the number of passenger car sales growing at a slightly slower rate (5.3% CAGR) than light trucks (5.6% CAGR). Asia Pacific will remain the largest market, with more than 2.0 million LD NGVs sales in 2024.
In North America, the high upfront cost, limited fueling infrastructure, reduced utility, and increased interest in electrification are likely to limit the demand for LD NGVs, the research firm posits. Navigant forecasts only 56,251 LD NGV sales in 2014 in North America. This region seems likely to remain focused on the fleet markets (such as municipal vehicles). MHD vehicles, particularly for local applications, including refuse trucks, delivery vehicles, and transit buses that operate out of centralized depots, will likely be the main market for NGVs.
The markets for LD and medium- and heavy-duty (MHD) NGVs are driven by several key factors that differ widely based on location: the availability of refueling infrastructure; tightening tailpipe emissions requirements; and total cost of ownership, which includes acquisition cost and the low cost of natural gas (NG) compared to gasoline and diesel. The mix of NGV types varies broadly based on local market conditions.
The report suggests that a number of factors could hinder near-term growth prospects in several regions:
Political tensions in Eastern Europe could affect supply and prices of gas exports from Russia to Western Europe.
Demand for new vehicle types in Western Europe continues to be sluggish as result of weak economic growth, and falling prices for crude oil globally also threaten to erode some of the price advantage of NG.
In North America, where Ford is a major vendor of LD and MD NGVs, a potentially difficult product transition for many of its trucks could limit supplies over the next couple of years.
Over the longer term, Navigant suggests, the need to continue emissions reduction and cut operating expenses will continue to spur NGV sales.