AEN-2016-Market-Report

egions, including the Middle East. Ongoing political tensions in Eastern Europe could also affect supply and
the prices of gas exports from Russia to Western Europe. A significant economic slowdown in China is hurting
overall consumer demand, particularly for new vehicles. Meanwhile, battery suppliers and OEMs, including LG
Chem, GM, and Tesla, are demonstrating significant progress in battery cost and capacity, potentially giving
BEVs a leg up over NGVs as alternatives to gasoline- or diesel-fueled vehicles.
Still, Navigant Research expects the global market for light-duty NGVs to grow at a CAGR of 4% from 2015
to 2025, surpassing 3.4 million vehicles by 2025. North American growth is expected to remain low compared
to other global markets due to high acquisition costs for NGVs and a low price delta between natural gas and
liquid fuels. Asia-Pacific is projected to be the largest regional market, accounting for over 45% of sales in 2025.
NGVs are more affordable in Asia-Pacific where vehicles are typically equipped with less expensive but heavier
type-1 gas cylinders rather than the lighter type-4 cylinders used in North America. Medium- and heavy-duty
NGVs should continue to see more solid growth over the next decade, as they provide an alternative to diesel,
and natural gas remains more practical in some ways than electrification for heavy vehicles. A global CAGR of
just under 10% is projected to bring total sales of these larger NGVs to more than 676,000 by 2025, with Asia-
Pacific accounting for more than 90% of that volume.
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