CNG and LPG Vehicle Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

The Light and Heavy Duty Natural Gas Vehicle Market Report is Segmented by Fuel Type (Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG)), Vehicle Type (Passenger Cars and Commercial Vehicles), Sales Channel (OEM and Retrofitting), and Geography (North America (United States, Canada, and Rest of North America), Europe (Germany, United Kingdom, France, Italy, and Rest of Europe), Asia-Pacific (India, China, Japan, South Korea, and Rest of Asia-Pacific), and Rest of the World (Middle East and Africa and South America)). The Report Offers the Market Size in Value (USD) and Forecasts for all the Above Segments.

CNG and LPG Vehicle Market Size

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CNG and LPG Vehicle Market Summary
Study Period 2019 - 2029
Market Size (2024) USD 6.73 Billion
Market Size (2029) USD 10.13 Billion
CAGR (2024 - 2029) 7.00 %
Fastest Growing Market Asia-Pacific
Largest Market Asia-Pacific

Major Players

CNG and LPG Vehicle Market  Major Players

*Disclaimer: Major Players sorted in no particular order

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CNG LPG Vehicle Market Analysis

The CNG LPG Vehicle Market size is estimated at USD 6.73 billion in 2024, and is expected to reach USD 10.13 billion by 2029, growing at a CAGR of 7% during the forecast period (2024-2029).

The global market for CNG and LPG vehicles has been growing, driven by increasing environmental concerns, rising fuel prices, and the push for energy diversification. In recent years, significant improvements have been made in CNG and LPG vehicle technologies, including fuel storage, engine efficiency, and safety features. These advancements have made CNG and LPG vehicles more competitive in terms of performance and reliability.

Lower operational costs due to cheaper CNG and LPG compared to petrol and diesel are significant drivers. This aspect is particularly appealing for commercial and high-mileage vehicles. Stricter emission regulations worldwide are boosting the adoption of CNG and LPG vehicles, as they emit fewer pollutants compared to conventional fuels.

With the global shift toward sustainable energy, CNG and LPG vehicles are likely to maintain their relevance, especially in regions where electric vehicle infrastructure is lagging. Continuous improvements in vehicle technology and fuel infrastructure may also enhance the market appeal of CNG and LPG vehicles.

Asia-Pacific is the largest market for automobiles in the world. The region, despite the sluggish growth in the Chinese market, the largest automobile market in the world, is expected to lead the growth in the CNG and LPG vehicles market during the forecast period.

Thus, the confluence of the aforementioned factors is expected to produce significant growth in the market in the coming years.

CNG LPG Vehicle Market Trends

Commercial Vehicles Fueling the Demand for CNG and LPG Vehicle

CNG and LPG are often cheaper than traditional petrol and diesel fuels. For commercial vehicle operators, fuel cost is a significant portion of operating expenses. The lower cost of CNG and LPG can translate into substantial savings over the lifetime of the vehicle, making these options financially attractive. Compared to the more volatile oil market, CNG and LPG prices are generally more stable. This stability allows businesses to better forecast and manage their operating costs, which is crucial for commercial operations.

Increasingly stringent emission regulations worldwide are a significant driver. CNG and LPG vehicles emit fewer pollutants such as nitrogen oxides (NOx), particulate matter (PM), and carbon dioxide (CO2) compared to diesel and petrol vehicles. In urban areas, especially where air quality is a major concern, CNG and LPG vehicles are more compliant with environmental standards.

The expansion of CNG and LPG fueling stations has made these fuels more accessible. This infrastructure development is often a result of either government initiatives or partnerships between private entities and government bodies. Modern CNG and LPG vehicles have seen significant improvements in terms of performance, reliability, and fuel efficiency. This makes them more competitive with traditional fuel vehicles.

In regions where natural gas or LPG is readily available and less expensive due to domestic production, there is a natural inclination to utilize these resources. Many cities worldwide are introducing low-emission zones where vehicles that do not meet certain emission standards are either banned or subject to a fee. CNG and LPG vehicles often meet these standards, making them a viable option for businesses operating within urban areas.

However, the cost advantage offered by natural gas vehicles and supportive government policies to encourage the adoption of alternative fuel-powered vehicles is driving the global CNG and LPG vehicle market. For instance,

  • In November 2022, 1 kg of CNG was priced at INR 78.61 (94 cents) compared to petrol, which cost INR 96.72 (USD 1.16) per liter, and diesel, which was priced at INR 96.67 (USD 1.16) per liter in New Delhi, India. This substantial difference in CNG and petrol/diesel pricing and the higher mileage of CNG vehicles than petrol/diesel vehicles has almost doubled the sales of CNG vehicles in India over the past few years.

Thus, the combination of all the above factors is anticipated to propel the market for CNG and LPG vehicles worldwide over the next five years.

CNG and LPG Vehicle Market- Europe Commercial Vehicle Sales, In Million Units, 2019-2022

Asia-Pacific Region is Expected to be the Largest Market During the Forecast Period

Asia-Pacific is forecasted to be the largest market for CNG and LPG vehicles in the world, led by the growth in India.

Cities in Asia-Pacific are among the most polluted globally. CNG and LPG vehicles emit fewer pollutants compared to diesel and petrol vehicles, making them attractive options for improving urban air quality. Therefore, many countries are aligned with global trends in emission standards. CNG and LPG vehicles are seen as practical steps toward meeting these stricter environmental regulations.

Moreover, regulatory policies across the region reinforce this trend. Stringent emission control policies, such as India's Bharat Stage VI emission standards, have expedited the adoption of cleaner fuel vehicles, including CNG and LPG. Furthermore, countries like China and India have specific policies promoting alternative fuel vehicles, situating CNG and LPG vehicles within broader carbon reduction strategies.

Technological advancements significantly contribute to the attractiveness of CNG and LPG vehicles. Improvements in vehicle technology have not only enhanced performance and reliability but also increased efficiency. The range and refueling times of these vehicles have seen marked improvements. Complementing these technological strides is the expansion of refueling infrastructure, which is critical for the practicality of CNG and LPG vehicles. This expansion, notably in India and China, has been instrumental in making these fuels more accessible for both personal and commercial use. The market dynamics of the Asia-Pacific region are characterized by a vast and growing vehicle population that further fuels the demand for CNG and LPG vehicles.

Following Asia-Pacific, Europe and North America are predicted to be the next biggest markets due to lower prices of natural gas and the adoption of stringent emission norms.

CNG and LPG Vehicle Market - Growth Rate by Region (2024 - 2029)

CNG LPG Vehicle Industry Overview

The CNG and LPG vehicle market is highly fragmented and dominated by several global and local players. Some of the major players are Hyundai Motor Company, Suzuki Motor Corporation, Nissan Motor Co. Ltd, Volkswagen AG, and Honda Motor Company. The major companies are launching new products and forming joint ventures to cement their market position. For instance,

  • In August 2022, Scania, a brand of Traton SE, the Volkswagen Group commercial vehicle division, delivered the country's first dedicated natural gas truck to BridCam Distributors in Gauteng, South Africa.
  • In January 2022, Iveco Bus partnered with SOTRA in Ivory Coast, Africa, to start the local assembly of CNG-powered Iveco Daily Minibus.
  • In January 2022, 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.

CNG LPG Vehicle Market Leaders

  1. Hyundai Motor Company

  2. Suzuki Motor Corporation

  3. Nissan Motor Co., Ltd.

  4. Volkswagen AG

  5. Honda Motor Company

*Disclaimer: Major Players sorted in no particular order

CNG and LPG Vehicle Market  Concentration
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CNG LPG Vehicle Market News

  • November 2023: The government of India committed to significantly expanding the network of CNG stations, setting an ambitious target to increase the count from 6,000 to 17,700 by 2030. In October, this initiative gained further momentum with the launch of the 12th City Gas Distribution (CGD) bidding round. This strategic move is aimed at closing the gaps in the existing gas infrastructure, a step that is expected to substantially drive the growth of the CNG vehicle market.
  • June 2023: The National Economic Council (NEC) has given its approval to the initiative proposed by the National Automotive Design and Development Council (NADDC) for initiating large-scale production of electric vehicles and vehicles powered by compressed natural gas in Nigeria.
  • January 2023: Suzuki Motor Corporation (SMC) revealed its plan to power its CNG vehicles using cow dung. This announcement came alongside the disclosure of an MoU signed between Maruti Suzuki and the National Dairy Development Board (NDDB), which is the largest dairy manufacturer in Asia. This initiative forms a part of SMC's growth strategy, which is looking ahead to 2030.
  • March 2022: Maruti Suzuki India Limited launched Dzire with S-CNG technology. Powered by an advanced K-series Dual Jet, Dual VVT 1.2L engine, Dzire S-CNG delivers a peak power of 57kW at 6000 rpm and 98.5 Nm torque, and an incredible mileage of 31.12 km/kg.

CNG and LPG Vehicle Market Report - Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Deliverables

    2. 1.2 Study Assumptions

    3. 1.3 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Overview

    2. 4.2 Market Drivers

      1. 4.2.1 Increase in Demand for Clean Energy Driving the Market

    3. 4.3 Market Restraints

      1. 4.3.1 Rising Safety Concerns is Antcipated to Restrain the Market

    4. 4.4 Value Chain/Supply Chain Analysis

    5. 4.5 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.5.1 Threat of New Entrants

      2. 4.5.2 Bargaining Power of Buyers/Consumers

      3. 4.5.3 Bargaining Power of Suppliers

      4. 4.5.4 Threat of Substitute Products

      5. 4.5.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION

    1. 5.1 By Fuel Type

      1. 5.1.1 Compressed Natural Gas (CNG)

      2. 5.1.2 Liquefied Petroleum Gas (LPG)

    2. 5.2 By Vehicle Type

      1. 5.2.1 Passenger Cars

      2. 5.2.2 Commercial Vehicles

    3. 5.3 By Sales Channel

      1. 5.3.1 OEM

      2. 5.3.2 Retrofitting

    4. 5.4 By Geography

      1. 5.4.1 North America

        1. 5.4.1.1 United States

        2. 5.4.1.2 Canada

        3. 5.4.1.3 Rest of North America

      2. 5.4.2 Europe

        1. 5.4.2.1 Germany

        2. 5.4.2.2 United Kingdom

        3. 5.4.2.3 France

        4. 5.4.2.4 Russia

        5. 5.4.2.5 Spain

        6. 5.4.2.6 Rest of Europe

      3. 5.4.3 Asia-Pacific

        1. 5.4.3.1 India

        2. 5.4.3.2 China

        3. 5.4.3.3 Japan

        4. 5.4.3.4 South Korea

        5. 5.4.3.5 Rest of Asia-Pacific

      4. 5.4.4 Rest of the World

        1. 5.4.4.1 South America

        2. 5.4.4.2 Middle East and Africa

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Vendor Market Share

    2. 6.2 Mergers & Acquisitions

    3. 6.3 Company Profiles

      1. 6.3.1 Hyundai Motor Company

      2. 6.3.2 Suzuki Motor Corporation

      3. 6.3.3 Nissan Motor Co. Ltd

      4. 6.3.4 Volkswagen AG

      5. 6.3.5 Honda Motor Company

      6. 6.3.6 IVECO SpA

      7. 6.3.7 AB VOLVO

      8. 6.3.8 Ford Motor Company

      9. 6.3.9 Tata Motors Limited

      10. 6.3.10 Traton SE

    4. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

  8. 8. CUSTOMIZATION

    1. 8.1 Market Volume In Units

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CNG LPG Vehicle Industry Segmentation

The CNG (compressed natural gas) and LPG (liquefied petroleum gas) vehicle market refers to the segment of the automotive industry that deals with the production, sale, and use of vehicles powered by CNG or LPG instead of traditional fuels like petrol and diesel. This market encompasses a range of vehicles, including passenger cars and commercial vehicles (like buses and trucks), depending on the region.

The market is segmented by fuel type, vehicle type, sales channel, and geography. By fuel type, the market is segmented into compressed natural gas (CNG) and liquefied petroleum gas (LPG)). By vehicle type, the market is segmented into passenger cars and commercial vehicles. By sales channel, the market is segmented into OEM and retrofitting. By geography, the market is segmented into North America, Europe, Asia-Pacific, and the Rest of the World. The report offers the market size in value (USD) and forecasts for all the above segments.

By Fuel Type
Compressed Natural Gas (CNG)
Liquefied Petroleum Gas (LPG)
By Vehicle Type
Passenger Cars
Commercial Vehicles
By Sales Channel
OEM
Retrofitting
By Geography
North America
United States
Canada
Rest of North America
Europe
Germany
United Kingdom
France
Russia
Spain
Rest of Europe
Asia-Pacific
India
China
Japan
South Korea
Rest of Asia-Pacific
Rest of the World
South America
Middle East and Africa
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CNG and LPG Vehicle Market Research FAQs

The CNG LPG Vehicle Market size is expected to reach USD 6.73 billion in 2024 and grow at a CAGR of 7% to reach USD 10.13 billion by 2029.

In 2024, the CNG LPG Vehicle Market size is expected to reach USD 6.73 billion.

Hyundai Motor Company, Suzuki Motor Corporation, Nissan Motor Co., Ltd., Volkswagen AG and Honda Motor Company are the major companies operating in the CNG LPG Vehicle Market.

Asia-Pacific is estimated to grow at the highest CAGR over the forecast period (2024-2029).

In 2024, the Asia-Pacific accounts for the largest market share in CNG LPG Vehicle Market.

In 2023, the CNG LPG Vehicle Market size was estimated at USD 6.26 billion. The report covers the CNG LPG Vehicle Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the CNG LPG Vehicle Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.

CNG and LPG Vehicle Industry Report

Statistics for the 2024 CNG and LPG Vehicle market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. CNG and LPG Vehicle analysis includes a market forecast outlook to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.

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CNG and LPG Vehicle Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)