The natural gas vehicle (NGV) market is taking off in some regions, although growth has been slower than previously projected, according to a new report from Navigant Research.
While drops in oil prices and gains in battery cost reduction and capacity for electric vehicles are hindering some of the advantages of NGVs, Navigant still expects the market to experience growth: The report forecasts that global annual NGV sales will increase from 2.4 million vehicles in 2015 to 3.9 million in 2025.
“A significant portion of the cost advantage of natural gas has evaporated in the past 12 months as a result of the collapse of world oil prices,” explains Sam Abuelsamid, senior research analyst with Navigant Research. “However, various regional factors also affect the markets for NGVs, including ongoing political tensions, the availability of refueling infrastructure, tightening tailpipe emissions requirements, and total cost of ownership.”
The collapse in global oil prices that began in late 2014 is now anticipated to continue through the rest of this decade, according to the report. While there continues to be an abundance of natural gas production in North America, the report says new production has slowed dramatically, which is expected to result in only modest regional growth, with a focus on fleet markets, particularly for local applications such as refuse trucks, delivery vehicles, and transit buses operating out of centralized depots.
More information on the full report is available here.