A recent report by Navigant Research – the research wing of Navigant Consulting Inc. (NCI - Free Report) – suggests that the number of natural gas vehicles (NGVs) on roads worldwide will reach 34.9 million by 2020, up from 18.2 million in 2013. The report states that low price of natural gas and persistently rising costs of gasoline and diesel will be the primary forces behind the increased popularity of NGVs.
NGVs are a cheaper and cleaner alternative to conventional gasoline-driven vehicles and customers are increasingly using either compressed natural gas (CNG) or liquefied natural gas (LNG) in passenger car segment as well as in commercial vehicles. LNG utilizes around 30% less space as compared to CNG. However, LNG is suitable for medium and heavy-duty trucks as its tanks are larger, heavier, and relatively more expensive.
According to the report, positive industry development such as the increased availability of NGVs and a greater willingness of motorists and fleet operators to buy alternative fuel vehicles will be the key factors for the phenomenal growth.
In order to capitalize on this growing business potential, some natural gas producers such as Chesapeake Energy Corporation (CHK - Free Report) have collaborated with automobile manufacturers like General Motors Company (GM - Free Report) and Whirlpool Corp. (WHR - Free Report) to develop appliances that can provide refueling options to natural gas powered cars at the car owner’s home.
Others like Honda Motor Co., Ltd. (HMC - Free Report) and Toyota Motor Corporation (TM - Free Report) are also likely to join the bandwagon and augment the production of NGVs.
Navigant is a global management consulting company serving energy-based and other regulated industries. The company helps clients to succeed in a business environment of changing regulations, stiff competition and evolving technology by providing effective management consulting services in areas such as business strategy development, marketing and sales, operations management, information technology and customer care.