The global compressed natural gas (CNG) and liquefied petroleum gas (LPG) vehicle market attained sales of 56.2 million vehicles in 2019. According to the forecast of P&S Intelligence, a market research company, the market size will reach 102.3 million units by 2030. Furthermore, the market will progress at a CAGR of 5.9% between 2020 and 2030. The growing usage of clean-energy vehicles and the ability of LPG and CNG vehicles to replace traditional vehicles are the main market growth drivers.
Additionally, the low running costs of these vehicles are also contributing heavily toward the boom of the CNG and LPG vehicle market. Automobiles that run on LPG and CNG have lower running costs than the diesel and gasoline-based vehicles. This is because of the lower costs of LPG and CNG than diesel and gasoline. The cost of CNG ranges from around $1.50 to $2.80 per gallon in Europe, registering a reduction of as much as 40–75% in fuel cost.
Because of the aforementioned reason, businesses that use CNG-fueled trucks usually see payback on the cost of conversion in 24–36 months. Similarly, in the U.S., the cost of LPG is around $2.00 per gallon, owing to which, the usage of LPG-based vehicles causes cost savings of up to 50% per gallon. The other advantages of using LPG are lower installation costs of LPG refueling systems and the smaller sizes of the LPG fuel tanks than the CNG ones.
Depending on fuel type, the CNG and LPG vehicle market is classified into LPG and CNG. Of these, the CNG category recorded higher growth in the market in the past and it is predicted to demonstrate faster growth in the forthcoming years. This is credited to the burgeoning deployment of CNG vehicles, particularly in the emerging economies of the Asia-Pacific (APAC) region. The market is further categorized, based on fuel type, into light and heavy-duty trucks, bus, and passenger cars.
Out of these, the passenger cars category registered the highest growth in the market during the past few years, mainly because of the high public awareness about the environmental consequences of diesel and gasoline-based vehicles and the implementation of government policies aimed at mitigating the air pollution levels. Globally, the CNG and LPG vehicle market recorded the highest growth in the past years, on account of the large-scale deployment of CNG vehicles in public transport fleets.
On the other hand, the market is predicted to exhibit the fastest growth in the Latin America, Middle East, and Africa (LAMEA) region in the upcoming years. This will be because of the fact that the emerging economies in this region such as Argentina and Brazil are providing lucrative growth opportunities for the market players, because of the surging purchasing power of the people and the subsequent rise in the per capita spending on personal transportation in the region.
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