Natural gas vehicles (NGVs) on the road in the world’s seven largest automobile markets will reach only 7.5 million as the industry struggles to capitalize on cheap shale-driven natural gas, Lux Research said.
In order to be used as transportation fuel, natural gas needs to be converted into liquid fuel using capital-intensive technology, or vehicles need to be retrofitted to run on compressed natural gas or liquefied natural gas. Technology innovation is not the most decisive growth factor – fuel price differentials, payback period for premium-priced NGVs and fueling infrastructure are the major drivers of growth.
“Cheap natural gas is disrupting the electricity, chemical, and heating industries, but the impact on the transportation market has been minimal,” said Andrew Soare, Lux Research Senior Analyst and the lead author of the report titled, “Shale Takes on Automotive: The Future of Natural Gas Vehicles.” “Technical and economic challenges mean that’s likely to remain true – even if fuel splits widen.”
Lux Research analysts built a market forecast model to predict NGV sales in the seven key auto markets that account for 75% of vehicles on the road today: the U.S., Europe, China, India, Brazil, Russia, and Japan. Among their findings:
[mappress] LNG World News Staff, May 10, 2013