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    Automotive Natural Gas Vehicle Market

    ID: MRFR/AM/4295-HCR
    100 Pages
    Swapnil Palwe
    September 2025

    Automotive Natural Gas Vehicle Market Research Report Information by Fuel Type (CNG and LNG), Vehicle Type (Light-duty Vehicle, Medium-duty Vehicle, and Heavy-duty Vehicle) And Region (North America, Asia-Pacific, Europe, And Rest Of The World) – Market Forecast Till 2032

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    Automotive Natural Gas Vehicle Market Summary

    As per Market Research Future Analysis, the Automotive Natural Gas Vehicle Market was valued at USD 13.6 Billion in 2023 and is projected to grow from USD 14.41 Billion in 2024 to USD 21.6 Billion by 2032, with a CAGR of 5.18% during the forecast period. The demand for liquefied Natural Gas (LNG) trucks is increasing due to the need for alternative fuel sources in transportation. Government initiatives to enhance natural gas distribution infrastructure are expected to further boost the market. The CNG segment dominated with over 95% volume share in 2022, while LNG is anticipated to grow the fastest due to favorable policies and economic growth in logistics. The Asia-Pacific region held the largest market share at over 46% in 2022, driven by rising passenger vehicle production, particularly in China.

    Key Market Trends & Highlights

    Key trends influencing the Automotive Natural Gas Vehicle Market include volatile fuel prices and government regulations.

    • Market size in 2023: USD 13.6 Billion; projected to reach USD 21.6 Billion by 2032.
    • CNG segment accounted for over 95% of volume share in 2022; expected to grow steadily.
    • Asia-Pacific region held over 46% market share in 2022; driven by passenger vehicle production.
    • LNG market anticipated to grow fastest from 2024 to 2032 due to favorable government policies.

    Market Size & Forecast

    2023 Market Size USD 13.6 Billion
    2024 Market Size USD 14.41 Billion
    2032 Market Size USD 21.6 Billion

    Major Players

    Dongfeng Motors Group Limited (China), AB Volvo (Sweden), Beiqi Foton Motors Group Limited (China), Shaanxi Automobile Group Limited (China), Daimler AG (Germany), CNH Industrial NV (The Netherlands), Landi Renzo (Italy), Westport (Canada)

    Automotive Natural Gas Vehicle Market Trends

    Increased pricing and volatile and disruptive petrol and diesel pricing drive the market growth.

    One of the key elements influencing the adoption of NGVs is the volatile and disruptive pricing structure associated with petrol and diesel. Due to several variables, including shifting oil supply and demand and the expansion of energy-intensive industries like transportation, electricity, and manufacturing, the oil and gas industry is currently experiencing economic instability. 

    Government rules governing environmental preservation and greenhouse gas (GHG) emissions are becoming stricter globally. As a result, natural gas is increasingly used in various applications across numerous industries. Governmental organizations and authorities worldwide are implementing several initiatives and programs to protect the environment.

    For instance, the European Green Vehicles Initiative (EGVI), the National Green Tribunal (India), the National Climate Change Plan of the UAE 2017-2050, the Natural Gas STAR Programme and the Methane Challenge Programme by the Environmental Protection Agency (US), the Sustainable and Livable Cities Initiative (SLCI) of China, India, and Brazil, and the National Green Tribunal (India) are all promoting the use of alternative fuels, such as compressed natural gas (CNG) and LNG, in the automotive industry.

    The transition towards cleaner transportation solutions is increasingly evident, as natural gas vehicles emerge as a viable alternative to traditional fuels, potentially reshaping the automotive landscape.

    U.S. Department of Energy

    Automotive Natural Gas Vehicle Market Drivers

    Market Growth Projections

    The Global Automotive Natural Gas Vehicle Market Industry is projected to experience substantial growth over the coming years. With a market value expected to reach 14.4 USD Billion in 2024 and further increase to 25.1 USD Billion by 2035, the industry is poised for a promising trajectory. The compound annual growth rate of 5.19% from 2025 to 2035 indicates a sustained interest in natural gas vehicles. This growth is likely driven by various factors, including government incentives, technological advancements, and increasing consumer awareness of environmental issues. The market's expansion reflects a broader shift towards sustainable transportation solutions, positioning natural gas vehicles as a viable option for the future.

    Growing Demand for Cleaner Fuels

    The increasing global emphasis on reducing greenhouse gas emissions drives the demand for cleaner fuels, including natural gas. The Global Automotive Natural Gas Vehicle Market Industry is witnessing a shift as consumers and governments alike prioritize sustainability. This trend is reflected in the projected market value of 14.4 USD Billion in 2024, indicating a robust interest in natural gas vehicles as an alternative to traditional fuels. Countries are implementing policies to encourage the adoption of natural gas vehicles, which further propels market growth. As environmental concerns escalate, the transition to cleaner fuels appears to be a pivotal factor in shaping the future of the automotive sector.

    Government Incentives and Policies

    Government incentives and supportive policies play a crucial role in the expansion of the Global Automotive Natural Gas Vehicle Market Industry. Many countries are implementing tax breaks, subsidies, and grants to promote the adoption of natural gas vehicles. These initiatives not only lower the initial investment costs for consumers but also encourage manufacturers to invest in NGV technology. For instance, various nations are setting ambitious targets for reducing emissions, which aligns with the benefits of natural gas vehicles. As these policies gain traction, they are likely to stimulate market growth, contributing to a compound annual growth rate of 5.19% from 2025 to 2035.

    Economic Viability of Natural Gas Vehicles

    Natural gas vehicles (NGVs) present an economically viable alternative to conventional gasoline and diesel vehicles. The Global Automotive Natural Gas Vehicle Market Industry benefits from the lower fuel costs associated with natural gas, which can be significantly cheaper than traditional fuels. This economic advantage is particularly appealing in regions where natural gas is abundant and readily available. As the market evolves, the cost-effectiveness of NGVs is likely to attract more consumers and fleet operators, contributing to the anticipated market growth to 25.1 USD Billion by 2035. The potential for reduced operating costs may encourage businesses to transition their fleets to natural gas, enhancing overall market dynamics.

    Increasing Awareness of Environmental Benefits

    The rising awareness of the environmental benefits associated with natural gas vehicles is influencing consumer preferences in the Global Automotive Natural Gas Vehicle Market Industry. As individuals become more informed about the lower emissions produced by NGVs compared to traditional vehicles, there is a noticeable shift in purchasing decisions. This trend is particularly evident in urban areas where air quality concerns are paramount. The market is poised for growth as consumers prioritize sustainability in their vehicle choices. The anticipated increase in market value to 25.1 USD Billion by 2035 suggests that this awareness could significantly impact the automotive landscape, driving further adoption of natural gas vehicles.

    Technological Advancements in NGV Infrastructure

    Technological advancements in natural gas vehicle infrastructure are pivotal for the growth of the Global Automotive Natural Gas Vehicle Market Industry. The development of more efficient refueling stations and improved storage technologies enhances the feasibility of using NGVs. Innovations in compression and distribution systems are making it easier for consumers to access natural gas, thereby increasing adoption rates. As infrastructure improves, the market is expected to expand significantly, with projections indicating a market value of 14.4 USD Billion in 2024. Enhanced infrastructure not only supports existing users but also attracts new customers, fostering a more robust market environment.

    Market Segment Insights

    Automotive Natural Gas Vehicle Fuel Type Insights

    The automotive natural gas vehicle market  segmentation based on fuel type includes CNG and LNG. The CNG segment accounted for over 95% of the volume share in 2022, which will continue to grow at a constant CAGR from 2024 to 2032. The rise in government measures to reduce rising vehicle emissions and protect the environment is responsible for the CNG market's expansion. Because CNG is nontoxic, less environmental harm results.

    The Federal Motor Vehicle Safety Standards 303 and 304 (US), which guarantee the precise requirements for fuel systems' integrity employing CNG fuel systems of dedicated CNG and dual-fuel CNG automobiles, are also compliant with CNG fuel systems. 

    The LNG market is anticipated to grow fastest between 2024 and 2032. The category is primarily encouraged by favorable government policy, the price difference between diesel and LNG, and the growing logistics sector supported by stronger economic growth. The main force behind the adoption of LNG is the road transport sector. The adoption of LNG Heavy-Duty Trucks (HDT) is higher than other types of LNG vehicles. Considering numerous nations' research and development efforts, LNG has enormous potential as an automotive fuel.

    Figure 1: Automotive Natural Gas Vehicle Market  by Fuel Type, 2022 & 2032 (USD Billion)

    Source: Secondary Research, Primary Research, Market Research Future Database and Analyst Review

    Automotive Natural Gas Vehicle Type Insights

    Based on the vehicle type, the automotive natural gas vehicle market segmentation includes light-duty vehicle, medium-duty vehicle, and heavy-duty vehicle. Over 87% of the total volume 2022 came from the light-duty vehicle segment. The excessive emissions of pollutants and GHG produced by the combustion of fossil fuels, such as coal, petrol, and diesel, are worsening air quality throughout the world. People are more likely to adopt alternative fuel sources and related technologies as a result of the deteriorating environment and air quality in nations like China, India, Saudi Arabia, Iran, and Pakistan.

    Get more detailed insights about Automotive Natural Gas Vehicle Market Research Report - Forecast to 2032

    Regional Insights

    By region, the study provides market insights into North America, Europe, Asia-Pacific and the Rest of the World. With a projected considerable CAGR during the forecast period, the Asia Pacific region, which held the largest global market share at more than 46% in 2022, is expected to maintain its dominance. The region's rising passenger automobile production and sales are to blame for this expansion. Around 50% of passenger automobile sales in APAC were in China. Due to the expansion of the natural gas infrastructure in nations like India, China, and Pakistan, the area has adopted NGVs at the highest rate.

    For instance, the Ministry of Petroleum and Natural Gas created the City Gas Distribution (CGD) policy in India. According to the plan, the government would upgrade the CNG network nationwide.

    Further, the major countries studied in the market report are The US, Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

    Figure 2: Automotive Natural Gas Vehicle Market  Share By Region 2022 (USD Billion)

    Automotive Natural Gas Vehicle Market  Share By Region 2022

    Source: Secondary Research, Primary Research, Market Research Future Database and Analyst Review

    Europe's automotive natural gas vehicle market accounts for the second-largest market share. Leading market competitors are making significant investments in R&D to diversify their product offerings, which will spur further growth in the market for automotive natural gas vehicles in Europe. Further, the German automotive natural gas vehicle market held the largest market share, and the UK automotive natural gas vehicle market was the fastest-growing market in the European region.

    North America is expected to grow at a significant growth rate due to increasing demand of lower emission powertrains and uncertainty around petrol and diesel prices in North America are further increasing the demand of natural gas vehicles.

    Key Players and Competitive Insights

    Leading market players are investing heavily in research and development to expand their product lines, which will help the automotive natural gas vehicle market grow even more. Market participants are also undertaking various strategic activities to expand their global footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. The automotive natural gas vehicle industry must offer cost-effective items to expand and survive in a more competitive and rising market climate.

    Manufacturing locally to minimize operational costs is one of the key business tactics manufacturers use in the global automotive natural gas vehicle industry to benefit clients and increase the market sector. The automotive natural gas vehicle industry has offered some of the most significant advantages in recent years. Major players in the automotive natural gas vehicle market include Dongfeng Motors Group Limited (China), Beiqi Foton Motors Group Limited (China), AB Volvo (Sweden), Daimler AG (Germany), Shaanxi Automobile Group Limited (China), Landi Renzo (Italy), CNH Industrial NV (The Netherlands), and Westport (Canada).

    State-owned Chinese automaker Dongfeng Motor Corporation Ltd. has its headquarters in Wuhan, Hubei. With automobile sales of 5.37 million, 3.50 million, 3.28 million, and 2.30 million in 2021, respectively, it is now the third largest of China's "Big Four" state-owned car manufacturers, which include SAIC Motor, FAW Group, Dongfeng Motor Corporation, and Changan Automobile.

     Through its subsidiary Dongfeng Motor Group, the firm develops and markets vehicles under its brands, including Venucia, Fengdu, Voyah, Aeolus, and Frothing, as well as under foreign-branded joint ventures, including Dongfeng-Honda, Dongfeng-Nissan, and Dongfeng-Peugeot Citron. 79% of sales in 2021 were made by cars of foreign brands. Under some of the abovementioned brands, including specifically created EV brands like Voyah, it also manufactures electric vehicles.

    Swedish multinational industrial company, The Volvo Group, is based in Gothenburg. Volvo offers financial services in addition to manufacturing, distributing, and selling trucks, buses, and construction equipment. It also provides marine and industrial drive systems. With its subsidiary Volvo Trucks, it was the world's second-largest producer of heavy-duty trucks in 2016. Up until 1999, when it was sold to Ford Motor Company, Gothenburg-based Volvo Cars was a subsidiary of AB Volvo. Volvo Cars has been a part of the Geely Holding Group automotive portfolio since 2010. 

    Both AB Volvo and Volvo Cars use the Volvo emblem and work together to maintain the Volvo Museum in Sweden. The company was first listed on the Stockholm Stock Exchange in 1935, and from 1985 to 2007, it was a component of the NASDAQ indexes. Although the ball bearing manufacturer SKF founded Volvo in 1915, the Volvo Group and Volvo Cars considered launching the company's first automobile series, the Volvo V 4, on April 14, 1927, to mark the beginning of their respective histories.

    Key Companies in the Automotive Natural Gas Vehicle Market market include

    Industry Developments

    Dongfeng Motor Group Limited (China):

    Product Launches: In 2024, Dongfeng Motor introduced a range of gas-powered vehicles, including minivans and light trucks, to diversify its NGV offerings. 

    Sales Performance: The company reported a remarkable 82.3% year-over-year increase in new energy vehicle (NEV) sales, reaching approximately 700,000 units between January and October 2024.

    Market Leadership: Dongfeng's commercial vehicle division led the industry in gas vehicle sales during the first half of 2024, with cumulative sales nearing 8,000 units by March and about 13,400 units by June.

    Beiqi Foton Motor Group Limited (China):

    Market Projections: As of November 29, 2023, Foton Motor anticipated that over 50% of China's heavy trucks could be powered by natural gas in 2024. This projection was based on the expanding price gap between crude oil and natural gas, making NGVs more economically attractive. 

    AB Volvo (Sweden):

    Industry Trends: While specific updates from AB Volvo regarding NGVs in 2025 are limited, the company has been monitoring the rapid adoption of liquefied natural gas (LNG) trucks in China. This shift has contributed to a decline in diesel demand, influencing global oil markets and prompting manufacturers to adapt to changing energy preferences. ​

    February 2021: To improve its standing among companies offering mobility solutions based on natural gas and renewable natural gas, Agility Fuel Solutions announced a merger with Hexagon Mobile Pipeline.

    September 2020: Westport Fuel Systems Inc. and its joint venture partner, UNO MINDA Group, reached a firm agreement. The deal allowed the business to cater to the expanding Indian NGV market more effectively.

    Future Outlook

    Automotive Natural Gas Vehicle Market Future Outlook

    The Automotive Natural Gas Vehicle Market is poised for growth at a 5.19% CAGR from 2024 to 2035, driven by environmental regulations, technological advancements, and rising fuel efficiency demands.

    New opportunities lie in:

    • Develop innovative CNG refueling infrastructure partnerships to enhance accessibility.
    • Invest in advanced engine technologies to improve performance and reduce emissions.
    • Explore strategic collaborations with governments for incentives on natural gas vehicles.

    By 2035, the market is expected to solidify its position as a viable alternative to traditional fuels.

    Market Segmentation

    Automotive Natural Gas Vehicle Type Outlook

    • Light-Duty Vehicle
    • Medium-Duty Vehicle
    • Heavy-Duty Vehicle

    Automotive Natural Gas Vehicle Regional Outlook

    North America
    • US
    • Canada

    Automotive Natural Gas Vehicle Fuel Type Outlook

    • CNG
    • LNG

    Report Scope

    Report Attribute/Metric Details
    Market Size 2023 USD 13.6 Billion
    Market Size 2024 USD 14.41 Billion
    Market Size 2032 USD 21.6 Billion
    Compound Annual Growth Rate (CAGR) 5.18% (2024-2032)
    Base Year 2023
    Market Forecast Period 2024-2032
    Historical Data 2018- 2023
    Market Forecast Units Value (USD Billion)
    Report Coverage Revenue Forecast, Market Competitive Landscape, Growth Factors, and Trends
    Segments Covered Fuel Type, Vehicle Type, and Region
    Geographies Covered North America, Asia Pacific, Europe, and the Rest of the World
    Countries Covered The US, Canada, German, France, UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil
    Key Companies Profiled Dongfeng Motors Group Limited (China), Beiqi Foton Motors Group Limited (China), AB Volvo (Sweden), Daimler AG (Germany), Shaanxi Automobile Group Limited (China), Landi Renzo (Italy), CNH Industrial NV (The Netherlands), and Westport (Canada)
    Key Market Opportunities Increased opportunities as a result of improvements in the technology used to extract natural gas
    Key Market Dynamics Decreasing emissions of greenhouse gases and reducing fuel costs

    Market Highlights

    Author
    Swapnil Palwe
    Team Lead - Research

    With a technical background as Bachelor's in Mechanical Engineering, with MBA in Operations Management , Swapnil has 6+ years of experience in market research, consulting and analytics with the tasks of data mining, analysis, and project execution. He is the POC for our clients, for their consulting projects running under the Automotive/A&D domain. Swapnil has worked on major projects in verticals such as Aerospace & Defense, Automotive and many other domain projects. He has worked on projects for fortune 500 companies' syndicate and consulting projects along with several government projects.

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    FAQs

    How much is the automotive natural gas vehicle market?

    The automotive natural gas vehicle market size was valued at USD 12.8 Billion in 2022.

    What is the growth rate of the automotive natural gas vehicle market?

    The automotive natural gas vehicle market is projected to grow at a CAGR of 5.18% during the 2024-2032 forecast period.

    Which region held the largest market share in the automotive natural gas vehicle market?

    Asia Pacific had the largest automotive natural gas vehicle market share.

    Who are the key players in the automotive natural gas vehicle market?

    The key players in the market are Dongfeng Motors Group Limited (China), Beiqi Foton Motors Group Limited (China), AB Volvo (Sweden), Daimler AG (Germany), Shaanxi Automobile Group Limited (China), Landi Renzo (Italy), CNH Industrial NV (The Netherlands), and Westport (Canada).

    Which fuel type led the automotive natural gas vehicle market?

    The CNG category dominated the automotive natural gas vehicle market in 2022.

    Which vehicle type had the largest market share in the automotive natural gas vehicle market?

    The light-duty vehicle had the largest automotive natural gas vehicle market share.

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