CNG and LPG Vehicle Market - Growth, Trends, and Forecasts (2020 - 2025)
発行: Mordor Intelligence Pvt Ltd
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The CNG and LPG vehicle market is anticipated to register a CAGR of over 7% during the Forecasts period (2020 - 2025).
Environmental and Cost Benefits Associated With Natural Gas Vehicles
One of the most important issues pertaining to natural gas vehicles is their driving range (especially true for heavy commercial vehicles), which is comparatively lower than that of petrol and diesel vehicles. This is because of the lower energy density of natural gas. One meter-cube of natural gas roughly corresponds to 1 liter of petrol or 1.1 liter of diesel. (General conversion: 1 meter-cube is equal to 1,000 liter). Hence, natural gases are compressed and used as CNG in vehicles, which offsets this problem a bit.
Another issue with NGVs, especially light-duty vehicles, is the loss of boot space. Gas cylinders are large and occupy a considerable amount of space and are generally placed in the boot compartment of the car. This significantly reduces the cargo space by almost 50% as compared to conventional fuel vehicles.
Also, refueling time for NGVs is longer than either petrol or diesel vehicles, and sometimes owners have to wait in long queues to get their vehicles refueled, due to the insufficient number of refueling stations, especially in areas where the share of NGVs is at par with conventional fuel vehicles.
Low concentration of re-fueling stations may also hamper the adoption of these vehicles. This is especially applicable to vehicles operating within the countryside due to higher costs of setting up stations and corresponding infrastructure and networking. The problem of conversion to CNG also persists in the rural environment, which may again hinder the market growth.
Furthermore, the performance of NGVs is highly dependent on the engine design and type, i.e., dedicated gas engine or not. A major issue that manufacturers face currently is in the loss of brake horsepower for a similar capacity CNG engine, when compared to petrol engine. This leads to lower performance, which may not go well with heavy commercial vehicles.
Environmental and Cost Benefits Associated With Natural Gas Vehicles Driving the Global Demand
Government measures across the world to reduce the environmental impact of road traffic have been a significant push for the adoption of cleaner vehicles since the past few decades. Legislations to improve fuel efficiency (and reduce CO2) and limit atmospheric pollution have been put into effect by a number of countries and cities.
Earlier, the main emphasis for fuel-efficiency measures was for smaller vehicles. However, now commercial vehicles and heavy goods vehicles are also being subjected to such structures, which has resulted in the penetration of LPG and CNG into these classes of vehicles. In a recent study conducted in 2019 by the Sustainable Gas Institute, emissions from natural gas-fueled trucks were noticed to be 15% lower than those of diesel trucks. The volume for these commercial vehicles is still considerably less, at around 1% of the total global volume of natural gas vehicles (NGVs).
Though new NGVs are costlier than their petrol (and sometimes diesel) counterparts, this initial trade-off is nullified in the medium- to long-term period post purchasing the vehicle, as there is considerable price difference between vehicles that run on gas and those that run on petrol and diesel.
The International Energy Agency (IEA) quotes a payback period of anywhere between two to four years in regions where there is a significant difference in fuel prices. Also, the cost of setting up refueling infrastructure is subsidized in some countries, which may result in more gas stations emerging, and in turn, lead to more people preferring to buy or use NGVs. This is expected to further result in high-volume usage of NGVs, which will be in-line with legislations to improve environmental conditions.
Automakers have identified this as an attractive proposition and are introducing vehicles that come factory fitted with NGV equipment. Customers are also preferring this type of set-up as the new vehicle is covered under warranty and can be serviced in authorized centers.
The market comprising various manufacturers offer natural-gas engines, either as dedicated (mono-fuel) otto-cycle engines or as duel fuel diesel-cycle engines. Companies, such as Volvo, Scania, and Iveco have all introduced new gas commercial vehicles.
In India, Maruti Suzuki, the country's largest vehicle manufacturer, has CNG option available for 8 of its models, which include both passenger cars and light commercial vehicles. Three-wheeler CNGs have also become very popular in the country over the years and are offered by manufacturers, like Bajaj, Mahindra, Piaggio, etc.
Also, in some cases, NGVs have lower maintenance cost as compared to conventional ICE vehicles. For instance, a 12-month comprehensive study between CNG and diesel transit buses revealed that gas-fueled buses are cheaper to maintain, by 12%, in comparison to diesel ones.
All the aforementioned factors are expected to drive the market for NGVs over the Forecasts period.
The CNG and LPG vehicle market is dominated by several players, such as Maruti Suzuki India Limited, MAN SE, IVECO SpA, Bajaj Auto Limited, and TATA Motor Limited. These companies are expanding their businesses with new innovative technologies so that they can have edge over their competitors.
Maruti Suzuki has been successfully satisfying Indian customers by offering contemporary technologies, such as auto gear shift, stylish products, such as Brezza, and eco-friendly options, such as factory-fitted CNG vehicles at the price point of customer choice.
MAN SE remains to be a leader in the commercial vehicle CNG market, especially in the MEA market.
Eicher (VECV) showcased CNG variants of its 4.9 and 5.9-metric-ton trucks, typically used in last-mile delivery operations by fleet owners. While these are the lightest payload trucks VECV offers, the automaker plans to bring in CNG trucks with higher payloads as the footprint of CNG stations is likely to increase in the coming years.
IVECO offers ecological diesel and natural gas engines on its entire range of vehicles and continues to develop engines with specific components and configurations optimized for use with CNG and LNG.