CNG & LPG Vehicles Market Size - By Vehicle, By Fuel, By Engine System, By Fitting, Analysis, Share, Growth Forecast, 2025 - 2034

CNG & LPG Vehicles Market Size

The CNG & LPG vehicles market was valued at USD 12.9 billion in 2024 and is projected to grow at a CAGR of 7.5% between 2025 and 2034. Developments in CNG technology are sparking interest in the market. Newer CNG technologies improve fuel economy, emissions, and oil-based performance. These developments help solve environmental issues and cater to the global demand for cleaner energy options, thereby expanding the market for CNG and LPG vehicles.
 

For example, in May 2023 Tata Motors, one of the top automotive makers in India, launched Altroz iCNG with the first-ever twin-cylinder CNG technology in India. The starting price of this model is expected to be USD 9,082.8 (All-India, EX showroom). It has smart features like a voice-assisted electric sunroof, wireless charger, air purifier and so on.
 

Eco-friendly and fuel-efficient transportation supports sustainable development and worldwide environmental initiatives aimed at combating pollution. This is coming from a need to improve climate change and air quality. That means everyone from consumers to governments are looking for cleaner options. Vehicles powered by CNG and LPG which have lower emissions are being used more and more to change how we think about taking care of the environment.
 

As an example, in March 2025, Investopia signed a Memorandum of Understanding (MoU) with the Emirates Motor Company (EMC) pertaining to the development of sustainable mobility technologies. This partnership is dedicated to the research and development of clean technologies and innovation in economic and automotive practices. The objectives of the MoU foster innovation in sustainable and smart mobility trying to keep pace with the vision of the UAE on the economy based on knowledge, technology and sustainability.
 

CNG & LPG Vehicles Market Trends

• To advance their environmental policy goals, governments globally are adopting policies to promote the use of CNG and LPG vehicles. These policies might include offering subsidies, tax breaks, and constructing CNG refueling stations to reduce carbon emissions.
   
• For example, Indian authorities are actively working towards realizing the goal of 20,000 Compressed Natural Gas (CNG) refueling stations by the year 2030. This goal seeks to support the effort aimed at increasing the proportion of natural gas utilized in the country’s energy production from 6.3% to 15% by 2030 as well as encourage the use of cleaner fuels.
   
• The CNG & LPG Vehicles market is seeing a boost owing to the improved power and fuel economy of CNG and LPG vehicles. Consumers and business are lured with the cost associated with lower fuel usage due to the advancements in technology that improve the mileage and efficiency of these vehicles. The enhanced fuel economy improved constituents of spending to the value chain make these vehicles not only more desirable but with the CNG and LPG fuelling offer richer fuel efficiency with the evident margin offering lead to growth of the market.
   
• The introduction of CNG three-wheeler vehicles is one of the latest trends in the market and is driven by their cost effectiveness, fuel economy, and urban transport. These vehicles are particularly appealing to small businesses and fleet operators in densely populated areas because of their lower operating costs compared to petrol or diesel counterparts.
   
• As an example, the over-the-road capability of the Ape Xtra LDX cargo three-wheeler launched on May 2023 at 3,067 USD by Piaggio Vehicles, one of the most significant SCV providers, was also appealing. This SCV unit is available with CNG configuration and a 5.5-foot cmd deck which provides unrivaled fuel economy and operating costs among competitors.
   

Trump Administration Tariffs

• Import duties on steel, aluminum, and automobile parts, particularly from China, will increase the manufacturing cost of CNG and LPG vehicles. Specialized tanks, valves, and conversion kits which these vehicles depend on available globally.
   
• The tariffs either will force manufacturers to absorb the additional costs or simply increase price making consumption less affordable, which stagnated adoption in economically vulnerable market segments.
   
• Tariffs on Asian-sourced components will interfere with the supply chains for converting gasoline vehicles into CNG or LPG. Regulators, injectors, and control modules are imported by a lot of small and medium enterprises.
   
• The growing costs and uncertainty impeded fleet operators from actively seeking alternative fuel conversions will diminish overall momentum in the market and postponed transitioning goals for the environment.
   

CNG & LPG Vehicles Market Analysis

Based on vehicles, the CNG & LPG vehicles market is divided into passenger vehicles, three-wheelers, and commercial vehicles. In 2024, the passenger vehicles segment dominated the market accounting for around 55% share and is expected to grow at a CAGR of over 7% during the forecast period.
 

• The CNG and LPG vehicles market is witnessing growth with the introduction of fuel-efficient CNG-powered trucks in its commercial vehicles segment. These trucks, which are designed to work with CNG, enhance the fuel efficiency of commercial vehicles, making them responsive to the need for cost-effective and eco-friendly transport options.
   
• For example, Ashok Leyland launched the 1922 CNG truck in the 18.5 ton category which has multiple cylinder configurations and four loading span choices in August 2023. The most salient advantage of the truck is its unmatched fuel efficiency and mileage. It also gives outstanding value for investment in the commercial vehicle sector because of its unparalleled fuel efficiency, impressive range, enhanced tire longevity, higher service intervals, reduced overall maintenance costs, and lower maintenance costs.
   
• In addition, several governments offer tax incentives, eco-friendly subsidies, or grants for adopting passenger vehicles powered by environmentally sustainable fuel which increases adoption rates. This, along with the established CNG/LPG infrastructure in India, China, and some Southeast Asian countries, propels growth.
   

Based on the fuel, the CNG & LPG Vehicles market is segmented into CNG and LPG. In 2024, the CNG segment dominates the market with 66% of market share and the segment is expected to grow at a CAGR of over 7.5% from 2025 to 2034.
 

• The cost efficiency and environmental benefits of CNG keep it on top. CNG is a cleaner alternative that aligns with environmental regulations and decreases emissions which helps to sustain the environment. Furthermore, on the economic side, it is very cost-effective for both consumers and businesses.
   
• Together with technology, infrastructure development, governmental funding, and even private sector investment builds a strong justification for fleet and consumer adoption of CNG in this fast-changing automotive world.
   
• For example, as of October 2024, Hyundai Motor India Ltd reported that the adoption rate of CNG vehicles is relatively higher in rural areas compared to urban areas. The adoption rate of CNG models is at 12.3% in urban areas and 14.6% in rural areas. CNG car adoption grew from 8.8% in FY22 to 10.7% in FY24 in urban markets and from 7.1% in FY22 to 12.0% in FY24 in rural markets.
   

Based on the engine system, the CNG & LPG vehicles market is segmented into dedicated system, bi-fuel, and dual fuel, with the bi-fuel category expected to dominate due to their fuel flexibility, cost-efficiency, and range assurance.
 

• These vehicles can switch between gasoline and CNG or LPG, giving users more range to drive and the ability to refuel using conventional fuel when alternative fuel stations are limited. This dual-fuel flexibility alleviates fuel anxiety, especially in areas with limited CNG/LPG infrastructure.
   
• Bi-fuel systems are especially appealing to value-minded individuals and fleet managers due to the substantial reduction in operating costs while still achieving desired performance levels.
   
• For instance, Hyundai Motor India has rolled out the Grand i10 Nios Hy-CNG Duo with ex-showroom pricing of INR 7.75 lakh for the Magna variant and INR 8.30 lakh for the Sportz variant from August 2024. This pioneering model enhances fuel efficiency by employing dual-cylinder CNG technology, which increases boot space.

In 2024, the India region in Asia Pacific dominated the CNG & LPG vehicles market with around 38% market share in Asia Pacific and generated around USD 2.4 billion in revenue.
 

• Investment in LPG and CNG vehicles in the Asia Pacific region is foremost in India, because of urban infrastructure development, market subsidies, increased fuel prices, and sustained investment in infrastructure. Most of the adoption of CNG vehicles is by passenger cars, public transport buses, and light commercial vehicles owing to their relatively lower emissions and cost.
   
• Clean mobility initiatives and the expansion of CNG refueling stations greatly accelerate growth. Furthermore, the retrofitting of existing motor vehicles with CNG/LPG kits is fairly widespread, particularly among price-sensitive metropolitan and tier-2 city consumers.
   
• As an example, Statista revealed that in the fiscal year of 2023, the figure for Compressed Natural Gas (CNG) passenger vehicles in India stood at almost 318 thousand units. This was followed by 241 CNG three-wheelers.
   

The CNG & LPG vehicles market in Germany is expected to experience significant and promising growth from 2025 to 2034.
 

• In Germany, the market for CNG and LPG vehicles has faced dynamic demand challenges due to the lack of EU emission allowances combined with consumer interest shifting towards electric vehicles. CNG vehicles saw moderate capture in public transportation equipped with favorable tax incentives and an already established refueling network along with logistics.
   
• The government's investment into alternative fuels continues to maintain some prospects, particularly within heavy duty and municipal work where electrification is still difficult.
   
• As an example, IVECO received an order in March 2024 to deliver 178 S-WAY CNG trucks to the Post and Parcel division of DHL Germany for further enhancement of the sustainable fleet integrated into DHL's decarbonizing road transport strategy to shrink the company’s carbon footprint/potentially using the DHL Innovation Center.
   

The CNG and LPG Vehicles market in the U.S. is expected to experience significant and promising growth from 2025 to 2034.
 

• The commercial and municipal classes of CNG & LPG vehicles in the US are chiefly responsible for market growth due to fleet vehicles such as buses, delivery trucks, and refuse collection vehicles. Because of subsidized policies at the state and federal levels, adoption of CNG is more widespread than LPG which is comparatively less clean.
   
• California and Texas remain the main focus for adoption, as their environmental protection policies and energy diversification policies are supportive of other fuel use in public and governmental transport fleets as well as private ones.
   
• For example, Statista predicts the sales figure for light duty trucks powered by gas internal combustion engines will reach approximately 6,500 units in the U.S. by 2030. This growth of natural gas is beneficial to the market in the U.S.
   

The CNG & LPG vehicles market in UAE is expected to experience significant and promising growth from 2025 to 2034.
 

• The market for CNG and LPG vehicles in the UAE is slowly growing due to government efforts to lower carbon emissions and diversify fuel sources. The development of CNG infrastructure by ENOC and other stakeholders is progressing in Dubai and Abu Dhabi.
   
• For example, the CNG promotion initiative started in Dubai through EMGAS, an ENOC subsidiary, in 2006. Also, over 3,000 public transport vehicles have been converted to operate on CNG. In addition, the RTA piloted a project that converted diesel-operated wooden abras (water taxis) into CNG-powered water taxis on the Dubai creek.
   

CNG & LPG Vehicles Market Share

• Top 7 companies of the CNG & LPG Vehicles industry are Volkswagen Group, Tata Motors, Toyota, IVECO, Honda, Ford Motor Company, and General Motors holding around 34% of the market in 2024.
   
• Volkswagen expands its portfolio throughout Europe, integrating vehicles such as the Polo TGI and Golf TGI. The firm employs emission-friendly CNG technology by installing turbo engines to increase fuel economy and mobility. In collaboration with other companies and government bodies, VW works to build the CNG network and provides support for the use of alternative fuels in the framework of his roadmap for sustainability and CO₂ reduction.
   
• Tata Motors aims at the new Tiago iCNG and Tigor iCNG models to provide low-cost and environmentally friendly transport with a growing CNG vehicle series. Tata enhances safety and increases fuel economy with an emphasis on urban and fleet customers. Tata is strategically aligning with state policy to increase CNG use in India, actually researching improvements for dual fuel systems and planning CNG options for its commercial vehicles.
   
• Excluding Japan, Toyota concentrates its effort in emerging markets like India and Southeast Asia for CNG and LPG vehicles. The firm works with local companies to provide CNG-ready vehicles, modifies them, and then sells them. CNG remains in the company’s plans for large hybrids and hydrogen-engined vehicles but supports using it as a bridging solution to lessen the emissions of commercial demand and taxi fleets during periods that favor natural gas vehicle infrastructure and policies.
   

CNG & LPG Vehicles Market Companies

Major players operating in the CNG & LPG vehicles industry are:

• Ford Motor Company
• General Motors
• Honda
• Hyundai Motor Company
• IVECO
• Mahindra & Mahindra
• MAN SE
• Tata Motors
• Toyota
• Volkswagen Group
   

The current CNG & LPG vehicles OEM level strategy focuses on improving the existing model’s fuel economy and emissions compliance. More care is given to emerging markets’ fuel infrastructure as a whole. There is also strong emphasis on dual fuel ITD R&D and promoted retrofitting for increasing conversions aimed at low-income households and cost-sensitive urban fleets interested in low-emission transport options.
 

To achieve deeper market penetration, companies regionally customize products according to the availability of fuel and local tax incentives. The marketing strategy is to sell the relatively lower unit emissions and TCO of CNG and LPG vehicles. These firms also work on enhancing the post-sale service franchise networks and the training of retrofit maintenance technicians. The strategic goal is to foster strong consumer perception and acceptance of CNG and LPG vehicles, as well as mitigate competition driven by electric or hybrid vehicles.
 

CNG & LPG Vehicles Industry News

• In November 2024, the Ogun State Government partnered with the Standards Organization of Nigeria (SON) to advance the adoption of Compressed Natural Gas (CNG)-powered vehicles. This collaboration aims to enhance safety protocols and streamline the conversion of Premium Motor Spirit (PMS) vehicles to CNG, promoting sustainable and eco-friendly transportation in the state. SON has adopted 80 CNG-related safety standards to minimize risks associated with CNG usage.
   
• In September 2023, Uno Minda Limited announced plans to increase its stake in its joint venture, Minda Westport Technologies Limited (MWTL), from 50% to 76% by acquiring an additional 26% stake from its partner, Westport Fuel Systems Italia S.r.l. The move aims to accelerate growth in the Compressed Natural Gas (CNG) and other alternative fuel markets, leveraging Uno Minda's manufacturing expertise and Westport's technology.
   
• In July 2024, Bajaj Auto is preparing to launch the Qute CNG, which Rakesh Sharma, Executive Director of Bajaj Auto, has called India's first Auto Taxi. The Qute is a 4-seater hatchback available in both LPG and CNG variants, offering a cleaner and more economical alternative to gasoline. It features an all-weather monocoque body and lower operating costs, making it an attractive option for affordable and comfortable commutes. Bajaj Auto will also begin exporting the Qute CNG to Egypt soon.
   
• In August 2023, Tata Motors introduced the CNG version of its micro SUV, Punch, with a price ranging from USD 8,541.4 to USD 11,645.2. This CNG-powered vehicle is equipped with additional features including a voice-assisted electric sunroof, LED DRLs, automatic projector headlamps, 16-inch diamond-cut alloy wheels, and a 7-inch infotainment system by Harman.
   

The CNG & LPG vehicles market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue ($ Mn/Bn) and shipment (Units) from 2021 to 2034, for the following segments:

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Market, By Vehicle

• Passenger vehicles
  • Hatchback
  • Sedan
  • SUV 
• Three-wheelers
• Commercial vehicles
  • Light Commercial Vehicles (LCV)
  • Medium Commercial Vehicles (MCV)
  • Heavy Commercial Vehicles (HCV)

Market, By Fuel

• LPG
• CNG

Market, By Engine System

• Dedicated system
• Bi-fuel
• Dual fuel

Market, By Fitting

• OEM
• Aftermarket

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Russia
  • Nordics
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • ANZ
  • Southeast Asia
• Latin America
  • Brazil
  • Mexico
  • Argentina 
• MEA
  • UAE
  • Saudi Arabia
  • South Africa