AEN-2016-Market-Report

In Japan, the automakers are partnering in a major effort to build out infrastructure for their hydrogen vehicles.
Honda, Toyota, and Nissan are part of an agreement between 10 Japanese gas companies to jointly develop a
100-station hydrogen highway in Japan. In South Korea, there are now 11 stations throughout the country. The
Hyundai-Kia Motor Co. has been working with the government to increase the availability of these stations.
From Europe to the Far East, the effort to bring hydrogen to the road continues.
As Vehicle Sales Lag, Natural Gas Vehicle Infrastructure Sags
In order for any alternative to gasoline or diesel to be viable as a transportation fuel, refueling infrastructure
needs to be readily available. In the arena of alternative fuels for transportation, natural gas has proven to
be one of the most popular alternatives to traditional liquid fuels in many global markets. Natural gas for
use as a transportation fuel is available in two forms, CNG and LNG, with the former being by far the more
common. CNG is primarily used for vehicles that operate within a limited geographic region, while LNG is more
commonly used for long-haul trucking applications. CNG is stored in high-pressure tanks at 3,000–3,600 psi and
U.S. Natural Gas Vehicle, All Classes
can be stored for extended periods of time. LNG is stored in low pressure, cryogenic tanks at -259ºF.
Natural gas has a number of distinct benefits compared with other options, particularly for larger vehicles. As
a resource, natural gas is widely distributed around the globe, and with newer extraction techniques, such as
horizontal drilling and hydraulic fracturing, usable supplies have risen significantly in the past decade. As a
result, prices have fallen to less than half of the peaks reached in 2005 and 2008.
However, in the last 12 months, low gasoline
prices have begun to hurt demand for NGVs,
which in turn discourages investment in
infrastructure. As the price differential between
the two fuels shrinks, the operating cost savings
lag behind the premium in vehicle purchase
price, which for light-duty NGVs is $7,000 to
$15,000 and for medium- to heavy-duty NGVs
is up to $50,000. U.S. revenue from sales of
light- and heavy-duty NGVs was down 9% and
7%, respectively in 2015, though the two still
combined for over $1.5 billion in total. (Figure
3.2)
With NGVs struggling in the market, the U.S.
market for Natural Gas Fueling Stations serving
long-haul trucks was down 45% in 2015, with
revenue of $55 million. For light-duty vehicles,
revenue from Fueling Stations was down 40%, to
$108 million. In total, the U.S. market in 2015 was
$163 million. (Figure 3.3)
Despite facing difficult market conditions at the
moment, natural gas still has its advantages.
Where fueling stations are available, CNG and
LNG are typically fast and convenient to use.
Fast-fill CNG pumps and most LNG pumps can
U.S. Natural Gas Vehicles, all Classes
$1,682 M
$1,542 M
$1,337 M
$952 M
$562 M
2011 2012 2013 2014 2015
Figure 3.2 (Source: Navigant Research)
U.S. Natural Gas Fueling Station, All Classes
U.S. Natural Gas Fueling Stations,
all Classes
*Revenue shown only for product categories with revenue data for all years 2011 - 2015
$351 M
$279 M
$243 M
$202 M
$163 M
2011 2012 2013 2014 2015
Figure 3.3 (Source: Navigant Research)
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