Photo via Wikipedia.

Photo via Wikipedia.

Global annual sales of natural gas vehicles (NGV) should grow to 3.9 million in 2025 from 2.4 million vehicles in 2015, according to a new report from Navigant Research.

Growth in adoption of natural gas vehicles has been slower than previously anticipated, mostly due to drops in oil prices, as well as lower costs and increased capacity of batteries for electrified vehicles.

The drop in global oil prices that began in late 2014 is now anticipated to continue through the rest of this decade. While there continues to be an abundance of natural gas production in North America, new production has slowed dramatically, which is expected to result in modest regional growth with a focus on fleet markets, particularly with refuse trucks, delivery vehicles, and transit buses operating out of centralized depots.

“A significant portion of the cost advantage of natural gas has evaporated in the past 12 months as a result of the collapse of world oil prices,” said Sam Abuelsamid, a senior research analyst with Navigant. “However, various regional factors also affect the markets for NGVs, including ongoing political tensions, the availability of refueling infrastructure, tightening tailpipe emissions requirements, and total cost of ownership.”

Regional factors that could bolster adoption include increased pipelines to distribute natural gas in Europe and Asia-Pacific, as well as increased extraction via hydraulic fracturing in North America. regional factors that could hinder adoption include ongoing political tensions in Eastern Europe that could affect supply and the prices of gas exports from Russia to Western Europe.

The report, "Natural Gas Vehicles," examines the global market for NGVs with a focus on passenger cars, light duty trucks and vans, medium-duty and heavy-duty trucks and buses. The study provides an analysis of the key factors expected to influence demand for NGVs, including fuel prices, infrastructure availability, regulations, and technical issues.

Global market forecasts, broken down by vehicle segment, alternative drivetrain, and region, extend through 2025. The study also analyzes how market and technology issues will affect automobile and truck manufacturers; suppliers of natural gas engines, fuel storage, and delivery hardware; and the companies that convert liquid-fueled vehicles to natural gas.