One of the major factors fueling the popularity of compressed natural gas (CNG) and liquified petroleum gas (LPG)-powered vehicles is their lower operating costs than the diesel and gasoline-powered vehicles. In Europe, the cost of CNG lies in the range of around $1.50–$2.80 per gallon on a gasoline-gallon equivalent basis. This means that it is 40–75% cheaper than gasoline or diesel. The companies utilizing CNG-powered trucks often witness payback on the conversion cost within 24–36 months.
Similarly, in the U.S. the cost of LPG is around $2.00 per gallon, which leads to 50% cost savings per gallon when compared to diesel and gasoline. Apart from the low running costs of these vehicles, the expansion of the e-commerce industry is also fueling their demand across the world. As per many reports, the share of e-commerce sales in the global retail sales grew from 10% in 2017 to nearly 14% in 2019.
Furthermore, e-commerce sales are predicted to account for nearly 25% of the worldwide retail sales by 2025. This is attributed to the surge in the e-commerce industry across the world. With the expansion of this industry, the demand for greener automobiles is growing rapidly. As a result, many companies are increasingly adopting greener mobility solutions such as CNG and LPG-powered vehicles. This is, in turn, fueling the growth of the global CNG and LPG vehicle market.
This is credited to the growing deployment of CNG vehicles, especially in the emerging economies of Asia-Pacific (APAC). When vehicle type is taken into consideration, the CNG and LPG vehicle market is divided into bus, light and heavy-duty trucks, and passenger cars categories. Out of these, the passenger car category held the largest share in the market in 2019, mainly because of the huge public awareness about the environmental degradation caused due to the usage of diesel and gasoline-powered vehicles.
Hence, it is safe to say that the demand for CNG and LPG vehicles will soar all over the world in the coming years, mainly because of their lower operating costs than the gasoline and diesel-powered vehicles and the booming e-commerce industry.
