Automotive Natural Gas Vehicle Market

• Increased pricing and volatile and disruptive petrol and diesel pricing drive the market growth.

One of the key elements influencing the adoption of NGVs is the volatile and disruptive pricing structure associated with petrol and diesel. Due to several variables, including shifting oil supply and demand and the expansion of energy-intensive industries like transportation, electricity, and manufacturing, the oil and gas industry is currently experiencing economic instability. 

Government rules governing environmental preservation and greenhouse gas (GHG) emissions are becoming stricter globally. As a result, natural gas is increasingly used in various applications across numerous industries. Governmental organizations and authorities worldwide are implementing several initiatives and programs to protect 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, the Natural Gas STAR Programme and the Methane Challenge Programme by the Environmental Protection Agency (US), the Sustainable and Livable Cities Initiative (SLCI) of China, India, and Brazil, and the National Green Tribunal (India) are all promoting the use of alternative fuels, such as compressed natural gas (CNG) and LNG, in the automotive industry.

The Global Automotive Natural Gas Vehicle Market Industry is projected to experience substantial growth over the coming years. With a market value expected to reach 14.4 USD Billion in 2024 and further increase to 25.1 USD Billion by 2035, the industry is poised for a promising trajectory. The compound annual growth rate of 5.19% from 2025 to 2035 indicates a sustained interest in natural gas vehicles. This growth is likely driven by various factors, including government incentives, technological advancements, and increasing consumer awareness of environmental issues. The market's expansion reflects a broader shift towards sustainable transportation solutions, positioning natural gas vehicles as a viable option for the future.

The increasing global emphasis on reducing greenhouse gas emissions drives the demand for cleaner fuels, including natural gas. The Global Automotive Natural Gas Vehicle Market Industry is witnessing a shift as consumers and governments alike prioritize sustainability. This trend is reflected in the projected market value of 14.4 USD Billion in 2024, indicating a robust interest in natural gas vehicles as an alternative to traditional fuels. Countries are implementing policies to encourage the adoption of natural gas vehicles, which further propels market growth. As environmental concerns escalate, the transition to cleaner fuels appears to be a pivotal factor in shaping the future of the automotive sector.

Government incentives and supportive policies play a crucial role in the expansion of the Global Automotive Natural Gas Vehicle Market Industry. Many countries are implementing tax breaks, subsidies, and grants to promote the adoption of natural gas vehicles. These initiatives not only lower the initial investment costs for consumers but also encourage manufacturers to invest in NGV technology. For instance, various nations are setting ambitious targets for reducing emissions, which aligns with the benefits of natural gas vehicles. As these policies gain traction, they are likely to stimulate market growth, contributing to a compound annual growth rate of 5.19% from 2025 to 2035.

Natural gas vehicles (NGVs) present an economically viable alternative to conventional gasoline and diesel vehicles. The Global Automotive Natural Gas Vehicle Market Industry benefits from the lower fuel costs associated with natural gas, which can be significantly cheaper than traditional fuels. This economic advantage is particularly appealing in regions where natural gas is abundant and readily available. As the market evolves, the cost-effectiveness of NGVs is likely to attract more consumers and fleet operators, contributing to the anticipated market growth to 25.1 USD Billion by 2035. The potential for reduced operating costs may encourage businesses to transition their fleets to natural gas, enhancing overall market dynamics.

The rising awareness of the environmental benefits associated with natural gas vehicles is influencing consumer preferences in the Global Automotive Natural Gas Vehicle Market Industry. As individuals become more informed about the lower emissions produced by NGVs compared to traditional vehicles, there is a noticeable shift in purchasing decisions. This trend is particularly evident in urban areas where air quality concerns are paramount. The market is poised for growth as consumers prioritize sustainability in their vehicle choices. The anticipated increase in market value to 25.1 USD Billion by 2035 suggests that this awareness could significantly impact the automotive landscape, driving further adoption of natural gas vehicles.

Technological advancements in natural gas vehicle infrastructure are pivotal for the growth of the Global Automotive Natural Gas Vehicle Market Industry. The development of more efficient refueling stations and improved storage technologies enhances the feasibility of using NGVs. Innovations in compression and distribution systems are making it easier for consumers to access natural gas, thereby increasing adoption rates. As infrastructure improves, the market is expected to expand significantly, with projections indicating a market value of 14.4 USD Billion in 2024. Enhanced infrastructure not only supports existing users but also attracts new customers, fostering a more robust market environment.

By region, the study provides market insights into North America, Europe, Asia-Pacific and the Rest of the World. With a projected considerable CAGR during the forecast period, the Asia Pacific region, which held the largest global market share at more than 46% in 2022, is expected to maintain its dominance. The region's rising passenger automobile production and sales are to blame for this expansion. Around 50% of passenger automobile sales in APAC were in China. Due to the expansion of the natural gas infrastructure in nations like India, China, and Pakistan, the area has adopted NGVs at the highest rate.

For instance, the Ministry of Petroleum and Natural Gas created the City Gas Distribution (CGD) policy in India. According to the plan, the government would upgrade the CNG network nationwide.

Further, the major countries studied in the market report are The US, Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 2: Automotive Natural Gas Vehicle Market  Share By Region 2022 (USD Billion)

Source: Secondary Research, Primary Research, Market Research Future Database and Analyst Review

Europe's automotive natural gas vehicle market accounts for the second-largest market share. Leading market competitors are making significant investments in R&D to diversify their product offerings, which will spur further growth in the market for automotive natural gas vehicles in Europe. Further, the German automotive natural gas vehicle market held the largest market share, and the UK automotive natural gas vehicle market was the fastest-growing market in the European region.

North America is expected to grow at a significant growth rate due to increasing demand of lower emission powertrains and uncertainty around petrol and diesel prices in North America are further increasing the demand of natural gas vehicles.

Leading market players are investing heavily in research and development to expand their product lines, which will help the automotive natural gas vehicle market grow even more. Market participants are also undertaking various strategic activities to expand their global footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. The automotive natural gas vehicle industry must offer cost-effective items to expand and survive in a more competitive and rising market climate.

Manufacturing locally to minimize operational costs is one of the key business tactics manufacturers use in the global automotive natural gas vehicle industry to benefit clients and increase the market sector. The automotive natural gas vehicle industry has offered some of the most significant advantages in recent years. Major players in the automotive natural gas vehicle market include Dongfeng Motors Group Limited (China), Beiqi Foton Motors Group Limited (China), AB Volvo (Sweden), Daimler AG (Germany), Shaanxi Automobile Group Limited (China), Landi Renzo (Italy), CNH Industrial NV (The Netherlands), and Westport (Canada).

State-owned Chinese automaker Dongfeng Motor Corporation Ltd. has its headquarters in Wuhan, Hubei. With automobile sales of 5.37 million, 3.50 million, 3.28 million, and 2.30 million in 2021, respectively, it is now the third largest of China's "Big Four" state-owned car manufacturers, which include SAIC Motor, FAW Group, Dongfeng Motor Corporation, and Changan Automobile.

 Through its subsidiary Dongfeng Motor Group, the firm develops and markets vehicles under its brands, including Venucia, Fengdu, Voyah, Aeolus, and Frothing, as well as under foreign-branded joint ventures, including Dongfeng-Honda, Dongfeng-Nissan, and Dongfeng-Peugeot Citron. 79% of sales in 2021 were made by cars of foreign brands. Under some of the abovementioned brands, including specifically created EV brands like Voyah, it also manufactures electric vehicles.

Swedish multinational industrial company, The Volvo Group, is based in Gothenburg. Volvo offers financial services in addition to manufacturing, distributing, and selling trucks, buses, and construction equipment. It also provides marine and industrial drive systems. With its subsidiary Volvo Trucks, it was the world's second-largest producer of heavy-duty trucks in 2016. Up until 1999, when it was sold to Ford Motor Company, Gothenburg-based Volvo Cars was a subsidiary of AB Volvo. Volvo Cars has been a part of the Geely Holding Group automotive portfolio since 2010. 

Both AB Volvo and Volvo Cars use the Volvo emblem and work together to maintain the Volvo Museum in Sweden. The company was first listed on the Stockholm Stock Exchange in 1935, and from 1985 to 2007, it was a component of the NASDAQ indexes. Although the ball bearing manufacturer SKF founded Volvo in 1915, the Volvo Group and Volvo Cars considered launching the company's first automobile series, the Volvo V 4, on April 14, 1927, to mark the beginning of their respective histories.