Compressed Natural Gas and Liquefied Natural Gas Vehicle Market Size, Share, Growth, And Industry Analysis, By Type (CNG Vehicle and LNG Vehicle), By Application (Passenger Vehicle and Commercial Vehicle), Regional Insights, and Forecast To 2031

Updated On: 29 April 2024

Compressed Natural Gas and Liquefied Natural Gas Vehicle Market Report Overview

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global compressed natural gas and liquefied natural gas vehicle market size was USD 12480 million in 2022 and market is projected to touch 28072.21 Million by 2031, exhibiting a CAGR of 9.4% during the forecast period.

Vehicles that run on compressed natural gas (CNG) or liquefied natural gas are frequently used as a substitute to diesel and petrol. Many vehicles, including lift automobiles, buses, light and heavy trucks, motorbikes, cars, vans and trains, run on natural gas. Compressed natural gas and liquefied natural gas vehicle alternatives are favored since they are more affordable and environmentally benign than diesel or petrol.

Due to its widespread availability, reduced vehicle emissions, and lower price compared to other fuels such as petrol and diesel, natural gas is becoming more and more popular as a replacement fuel worldwide. The operators in the transportation industry are being prompted by the increased demand for alternative fuel alternatives to run their businesses to adopt LNG (liquefied natural gas) vehicles. Thus, there is a rising need for LNG-powered vehicles in the transportation sector. The demand for compressed natural gas and liquefied natural gas vehicles is also anticipated to increase throughout the estimated period due to the expanding government initiatives for the building of natural gas transportation infrastructure.

COVID-19 Impact: Sales of Vehicles were Impacted which Lowered the Demand for the Natural Gases

Due to the COVID-19 epidemic, the global economy has suffered a severe setback, which has had a detrimental effect on vehicle production. Several production facilities stopped operating as a result of the pandemic's aftereffects, which disrupted the supply chain. The outbreak hurt the sales of passenger and commercial vehicles, which lowered demand for compressed natural gas and liquefied natural gas vehicles in the automotive industry. In Europe, 5.1 million passenger cars were issued licenses in the first half of 2020, which was 39% fewer than in the same period in 2019, stated by the German Association of the Automotive Industry (VDA). 

Latest Trends

"Creation of Cryogenic Fuel Tanks to Lower Refueling Frequency and Extend the Range of LNG Vehicles"

One of the most recent advancements in the compressed natural gas and liquefied natural gas sector is the creation of sophisticated fuel storage systems that improve the effectiveness and security of natural gas vehicles. In order to decrease fuel boil-off and extend the range of LNG vehicles, businesses are creating cryogenic fuel tanks that can store LNG at lower temperatures. As an illustration, Chart Industries has created a cutting-edge vacuum-insulated cryogenic fuel tank for LNG cars that reduces the fuel boil-off rate by up to 70% when compared to conventional cryogenic tanks, extending range and lowering refueling frequency. 

Compressed Natural Gas and Liquefied Natural Gas Vehicle Market Segmentation

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• By Type Analysis

According to type, the market can be segmented into CNG Vehicle and LNG Vehicle

• By Application Analysis

Based on application, the market can be divided into passenger vehicle and commercial vehicle.

Driving Factors

"Strict Government Laws Regarding the Safeguard of the Environment are Driving the Natural Gas Market"

Global government laws for greenhouse gas (GHG) emissions and preservation of the environment are getting stricter. The use of natural gas in several uses across numerous sectors is growing as a result. Governmental organizations and authorities all over the world are implementing a number of projects and programmes as well as taking countless actions to safeguard the environment. For instance, the European Green Vehicles Initiative (EGVI), the National Green Tribunal (India), the National Climate Change Plan of the UAE 2017–2050, and the Sustainable and Livable Cities Initiative (SLCI) of China, India, and Brazil are all promoting the use renewable fuels, such as CNG and LNG, in the motor vehicle sector. The Environmental Protection Agency (U.S.) also runs the Natural Gas STAR Programme and Methane Challenge Programme. This factor is driving the compressed natural gas and liquefied natural gas vehicle market growth in the long run.

"Lower Operating Costs Compared to Conventional Fuel Makes them a Popular Choice Among Consumers"

Compared to conventional petrol and diesel automobiles, compressed natural gas and liquefied natural gas vehicles have lower running costs. Natural gas is less expensive than petrol or diesel and is subject to fewer taxes and charges, which lowers the cost of fuel for CNG cars. Natural gas burns cleaner, producing fewer deposits and a longer lifespan for engines, which reduces maintenance expenses. Given their cheaper operating costs, LNG vehicles are a popular choice among both consumers and businesses.

Restraining Factors

"Rise in Demand for Electric Vehicles is Slowing Down the Need for Engines of Any Other Sort"

Climate change is happening all across the world. Worldwide efforts are being made to reduce emission of greenhouse gasses, especially carbon dioxide. The world's demand for electric vehicles is rising as a result of numerous countries adopting them to help them meet their net-zero emission targets. Electric vehicles, in contrast to traditional vehicles powered by gasoline, run on renewable energy and emit no pollution. An electric vehicle has an electric motor that runs on electricity from the battery, reducing the requirement for any other kind of engine such as the compressed natural gas and liquefied natural gas vehicles.

Compressed Natural Gas and Liquefied Natural Gas Vehicle Market Regional Insights

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"Major Passenger Car Sales Are Driving the Natural Gas Vehicle Demand in the Asia Pacific"

With a strong CAGR during the projected period, the Asia Pacific region is expected to maintain its dominance in the worldwide compressed natural gas and liquefied natural gas vehicle market share. Increased manufacture and sale of automobiles for passengers in the area can be credited for this expansion. The majority of passenger car sales in the region were made in China. The growth of the natural gas infrastructure in nations notably China, India, and Pakistan has made the area the greatest adopter of NGVs. The City Gas Distribution (CGD) policy, for instance, was created by India's Ministry of Petroleum and Natural Gas. The government would be building out the CNG infrastructure all across the nation under the proposal. 

Key Industry Players

"Key Players Focus on Mergers and Acquisitions to Gain a Competitive Advantage"

To acquire a competitive edge, businesses in the market are concentrating on growing their client bases. They place a strong emphasis on offering technologically sophisticated and modern products to improve their product lineup in the market.  In order to expand in the industry, the organizations are also launching strategic efforts such as regional expansions, purchases, mergers, partnerships, and collaborations. Additionally, by engaging in M&A activity, these businesses are increasing their market shares. For instance, Agility Fuel Solutions announced in February 2021 a combination with Hexagon Mobile Pipeline to improve its standing among suppliers of natural gas and renewable natural gas solutions for transportation.

List of Market Players Profiled

• Maruti Suzuki (India)
• Iran Khodro (Iran)
• Volkswagen (Germany)
• Hyundai Motor (South Korea)
• Stellantis (The Netherlands)
• FAW Group (China)
• Chang'an Automobile (China)
• General Motors (U.S.)

Report Coverage

This report covers the compressed natural gas and liquefied natural gas vehicle market. The CAGR expected to be in during the forecast period, and also the USD value in 2022 and what it is expected to be in 2031. The effect COVID-19 had on the market in the beginning of the pandemic. The latest trends taking place in this industry. The factors that are driving this market as well as the factors that are restraining the growth of industry. The segmentation of this market based on type and applications. The region leading in the industry and why they will continue to do so during the forecast period. Further, the key market players, what all is being done by them to stay ahead of their competition as well as retain their market positions. All these details are covered in the report.