CNG Powertrain Market Size

The global CNG powertrain market size was valued at USD 90.3 billion in 2023 and is projected to grow at a CAGR of 17.2% between 2024 and 2032. Stricter environmental regulations and emission standards worldwide are significantly driving the growth of the market. Governments are increasingly implementing stringent policies to reduce greenhouse gas emissions and improve air quality, particularly in urban areas with high pollution levels. For instance, in July 2024, the Centre for Economic Policy Research published a report on “how standards for greenhouse gas emissions and fuel economy induce innovation in clean car technologies”.

CNG vehicles emit lower levels of nitrogen oxides, particulate matter, and carbon dioxide compared to conventional gasoline and diesel vehicles, making them a preferred choice for meeting these regulations. This regulatory push encourages automakers and fleet operators to invest in CNG technology to comply with legal requirements while capitalizing on potential tax incentives and subsidies. As environmental awareness grows, the demand for cleaner transportation solutions like CNG powertrains is expected to rise, driving market expansion.

Moreover, the expansion of CNG refueling infrastructure is a critical driver for the growth of the CNG powertrain market. Increased investments from governments and private entities in building more refueling stations significantly improve accessibility for consumers and fleet operators. This enhanced availability alleviates range anxiety, a common concern among potential CNG vehicle buyers, allowing them to refuel conveniently and confidently.

Additionally, improved infrastructure supports the deployment of CNG vehicles in public transport and commercial fleets, promoting a shift towards cleaner energy solutions. The growth of CNG infrastructure also encourages manufacturers to develop more models tailored for CNG use, further stimulating adoption. Ultimately, a robust refueling network enhances the overall viability and attractiveness of CNG as a sustainable alternative fuel source.

CNG Powertrain Market Trends

CNG powertrains are witnessing significant technological advancements in engine and fuel storage technology. These innovations enhance performance, efficiency, and safety. Improved combustion techniques and advanced fuel injection systems increase efficiency and reduce emissions, making CNG vehicles more attractive to environmentally conscious consumers.

Additionally, the use of lightweight composite materials in CNG tanks has increased the range and capacity of CNG vehicles while reducing their overall weight. These advancements result in more compact and efficient fuel systems, improving vehicle performance and user experience. Furthermore, upgraded refueling infrastructure technologies facilitate quicker and safer CNG refueling processes, encouraging adoption. As these technologies evolve, they create more viable and competitive CNG options, stimulating market growth and attracting investment in the sector.

For instance, in August 2023, Allison Transmission successfully delivered its 4500 Rugged Duty Series (RDS) transmission for the new Mack Granite® model powered by compressed natural gas (CNG). This collaboration aims to provide an alternative fuel solution specifically designed for refuse collection customers, enhancing the durability and performance of the trucks. The truck is available exclusively as an axle-back model and showcases a modernized design with a new chrome grille and self-heating LED headlamps. These headlights improve visibility by up to 29% for forward visibility and 50% for peripheral visibility, enhancing safety during operation.

High initial costs for vehicles and conversions significantly hinder the CNG powertrain market. CNG vehicles often come with a higher price tag than their gasoline or diesel counterparts due to specialized components like CNG tanks and modified engines.

Retrofitting existing vehicles to run on CNG also incurs substantial costs, deterring both consumers and fleet operators from making the switch. This financial burden is particularly challenging in markets with tighter budgets or lower awareness of CNG's long-term benefits, such as reduced fuel expenses and lower emissions. Consequently, these elevated upfront costs impede widespread adoption, slowing the transition to cleaner energy solutions in the transportation sector.

CNG Powertrain Market Analysis

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Based on vehicles, the market is segmented into light commercial vehicles (LCVs), heavy commercial vehicles (HCVs), and passenger cars. In 2023, the passenger cars segment accounted for over 45% of the market share and is expected to exceed USD 180 billion by 2032. The passenger cars segment leads the CNG powertrain market, driven by the increasing demand for affordable and eco-friendly fuel alternatives among individual consumers.

CNG-powered passenger cars offer a lower total cost of ownership, as CNG is generally cheaper than gasoline and diesel. This cost advantage makes CNG cars particularly popular in regions with well-developed CNG infrastructure. In countries like India, China, and Brazil, government incentives and favorable policies encourage CNG adoption among urban populations, resulting in significant market penetration for CNG vehicles in this segment.

Additionally, advancements in CNG technology have improved fuel efficiency, mileage, and reduced emissions for passenger cars, aligning with global efforts to reduce carbon footprints. These factors collectively drive the high adoption of CNG powertrains in the passenger car segment.

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Based on the drive, the CNG powertrain market is divided into front wheel drive (FWD), rear wheel drive (RWD), and all-wheel drive (AWD). The front wheel drive (FWD) segment held around 58% of the market share in 2023, due to its cost-effectiveness, efficiency, and suitability for urban and passenger vehicles.

FWD systems, being lighter and more compact than rear-wheel or all-wheel drive options, are ideal for small to mid-sized passenger cars and light commercial vehicles where CNG adoption is significant. This configuration enhances fuel efficiency, a crucial benefit for CNG vehicles as it maximizes mileage per tank, appealing to cost-conscious consumers and businesses.

Additionally, FWD layouts provide improved traction on dry and paved surfaces, making them well-suited for city environments where CNG infrastructure is often concentrated. The reduced production costs associated with FWD systems attract manufacturers aiming to offer affordable, environmentally friendly CNG vehicle options in both developing and developed markets.

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Asia Pacific CNG powertrain market accounted for 45% of the revenue share in 2023 and is expected to exceed USD 180 billion by 2032. China leads the market in the Asia Pacific region and is expected to exceed USD 60 billion by 2032. China dominates the market, which stems from robust government initiatives promoting clean energy and significant investments in CNG infrastructure. The country has been expanding its CNG refueling stations to support growing urban populations and commercial fleets.

Additionally, stringent emissions regulations and a strong focus on reducing air pollution have spurred the adoption of CNG vehicles. The rising demand for cost-effective transportation solutions, particularly in public transit and logistics, further drives market growth in China.

The North American CNG powertrain market is seeing increased adoption, particularly in the commercial and public transportation sectors. Government incentives promoting alternative fuel use and stringent emissions regulations, especially in urban areas, are key drivers. The U.S. leads the market with significant investments in CNG infrastructure and a growing number of CNG-powered buses and heavy-duty trucks.

Canada also contributes to this growth by focusing on reducing greenhouse gas emissions. Although challenges such as limited consumer awareness and competition from electric and hydrogen fuel cell technologies exist, ongoing advancements in CNG technologies and infrastructure development present opportunities for expansion.

The CNG powertrain market in Europe is experiencing moderate growth, driven by stringent emissions regulations and increased investments in alternative fuel infrastructure. Italy and Germany are leading in CNG adoption due to supportive government policies and established refueling networks. The market is shifting towards cleaner public transportation, with many cities integrating CNG buses into their fleets. However, challenges include competition from electric vehicles and the need for more extensive CNG infrastructure in some regions. Overall, Europe’s commitment to reducing carbon emissions is fueling the demand for CNG powertrains.

In the MEA region, increasing urbanization and government initiatives, particularly in Iran and Egypt, are driving the market. In Latin America, significant growth is due to Brazil and Argentina's extensive CNG infrastructure and government support for alternative fuels. Both regions aim to reduce emissions and dependency on fossil fuels, leading to a rise in the adoption of CNG vehicles in public transport and logistics sectors.

CNG Powertrain Market Share

Robert Bosch GmbH., Cummins Inc., and Volkswagen AG collectively held a substantial market share of over 8% in the CNG powertrain industry in 2023. Bosch is advancing fuel systems and injection technologies to enhance efficiency and reduce the emissions of CNG engines. The company is investing in R&D to refine its CNG fuel injection systems and spark plugs. This initiative aims to lower emissions and improve fuel economy, aligning with tightening global emissions standards. Additionally, Bosch collaborates with automotive OEMs to ensure the efficient integration of its systems.

Cummins is focusing on developing high-performance, low-emission CNG engines for commercial applications. Emphasizing durability and scalability, its CNG powertrains are designed for trucks and buses. By investing in partnerships and R&D, Cummins aims to expand its CNG engine offerings globally, particularly in markets with strong demand for low-carbon solutions, reinforcing its position as a leader in clean power technologies.

Volkswagen is expanding its CNG vehicle lineup to reduce fleet emissions. The company integrates advanced CNG powertrains across multiple models and collaborates with industry partners to improve CNG infrastructure. By promoting CNG as a cost-effective and eco-friendly alternative for urban transport, Volkswagen aims to meet its sustainability goals while offering fuel-efficient options for consumers.

CNG Powertrain Market Companies

Major players operating in the CNG powertrain industry are:

• Continental
• Cummins
• Ford Motor
• General Motors
• Honda Motor
• Robert Bosch
• Stellantis
• Tata Motors Limited
• Volkswagen
• Volvo Group
  

CNG Powertrain Industry News

• In September 2024, Hyundai Motor India launched the Aura E variant equipped with dual-CNG technology. The Aura E variant is powered by a 1.2-litre bi-fuel petrol/CNG engine that produces 69 PS and 95.2 Nm of torque in CNG mode, while petrol mode delivers 82 PS and 114 Nm. It is paired exclusively with a 5-speed manual transmission. The claimed mileage for the CNG variant is 28.4 km/kg.
  
• In May 2024, Hexagon Agility announced a collaboration with Brudeli Green Mobility to integrate its CNG/RNG tanks into Brudeli's Powerhybrid technology for zero-emission vehicles (ZEV) targeting the North American market. This partnership aims to enhance the capabilities of Class 7 and 8 trucks, allowing them to meet stringent emissions regulations while maintaining diesel-like performance. Hexagon Agility will provide its Type 4 composite natural gas cylinders, which are lightweight and efficient, enabling the trucks to carry more fuel without significantly increasing weight.
  

The CNG powertrain market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue ($ Mn/Bn) and volume (Units) from 2021 to 2032, for the following segments:

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Market, By Component

• Engine
• Fuel injector
• Transmission
• Fuel tank
• Exhaust system
• Control unit

Market, By Vehicle

• Passenger cars 
  • Sedans
  • Hatchbacks
  • SUV
• Commercial vehicle
  • Light Commercial Vehicles (LCV)
  • Heavy Commercial Vehicles (HCV)

Market, By Drive

• Front Wheel Drive (FWD)
• Rear Wheel Drive (RWD)
• All-Wheel Drive (AWD)

Market, By Fuel

• Mono-fuel
• Bi-fuel

Market, By Application

• Transportation
• Logistics
• Industrial

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

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