CNG and LPG Vehicle Market Size to Uptrend USD 6.75 Bn by 2034

According to Towards Automotive Experts, the global CNG and LPG vehicle market size is calculated at USD 4.15 billion in 2025 and is expected to reach around USD 6.75 billion by 2034, growing at a CAGR of 4.93% from 2024 to 2034.

/EIN News/ -- Ottawa, April 25, 2025 (GLOBE NEWSWIRE) -- The global CNG and LPG vehicle market size was valued at USD 3.93 billion in 2024 and is predicted to hit around USD 6.75 billion by 2034, a study published by Towards Automotive a sister firm of Precedence Research.

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Market Overview:

The market for CNG (Compressed Natural Gas) and LPG (Liquefied Petroleum Gas) vehicles is witnessing rapid growth due to rising environmental concerns, fluctuating fuel prices, and a surging demand for cleaner, more cost-efficient alternatives to traditional fuels. These vehicles produce considerably lower emissions of CO₂, NOx, and particulate matter compared to gasoline and diesel vehicles, making them ideal solutions for tackling urban air quality issues. Governments across the globe are promoting these vehicles through subsidies, tax incentives, and more stringent emission regulations, prompting both manufacturers and consumers to switch to CNG and LPG vehicles.

The growth of fueling infrastructure and improvements in engine technology are boosting vehicle performance and access. The adoption rates in both the passenger and commercial sectors are rising, especially in areas with well-established refueling networks. As sustainability increasingly becomes a core element of transportation policies, the CNG and LPG vehicle market is likely to see lasting growth and innovation in the years ahead.

Major Trends in the CNG and LPG Vehicle Market:

• Government Incentives and Emission Norms: Governments are providing tax incentives, subsidies, and policy assistance to promote the use of CNG and LPG vehicles considering stricter emission standards and a move towards cleaner urban transport solutions.
• Expansion of Refueling Infrastructure: Nations are quickly increasing the number of CNG and LPG fueling stations to accommodate the growing number of vehicles, particularly in urban and semi-urban locations, improving convenience and promoting long-distance journeys.
• OEM Focus on Alternative Fuel Models: Leading automotive manufacturers are launching factory-equipped CNG and LPG variants to fulfill the rising demand for affordable, eco-friendly vehicles that offer enhanced engine performance and lower operational costs.
  

Limitations & Challenges in the CNG and LPG Vehicle Market:

• Limited Refueling Network in Rural Areas: Despite progress in urban areas, the limited number of CNG and LPG fueling stations in rural and remote locales limits vehicle usage and market growth in less developed regions.
• Lower Energy Density and Performance: CNG and LPG present lower energy densities compared to gasoline and diesel, resulting in shorter ranges and somewhat diminished power, which may deter performance-oriented consumers.
• High Initial Conversion Costs: The initial expenses for converting gasoline or diesel vehicles to CNG or LPG are still considerable, especially for retrofits in the aftermarket, which can discourage adoption among budget-conscious consumers and small fleet operators.
  

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Emerging Opportunities in the Market

The greatest prospects in the CNG and LPG vehicle market are found in developing economies, where urban air pollution presents a significant challenge and the savings on fuel are highly appreciated. Asia Pacific, Latin America, and Eastern Europe provide considerable growth potential due to increasing vehicle production and adoption, rising fuel costs, and a growing awareness of environmental issues. Government policies favoring alternative fuels, alongside an uptick in investments for refueling infrastructure, lay a supportive foundation for adoption. Moreover, public transport networks and commercial vehicle fleets are transitioning toward CNG and LPG to lower operating expenses and adhere to emission regulations, which further drives market growth in these areas.

Regional Analysis:

Asia Pacific’s Sustained Dominance in the CNG and LPG Vehicle Market: What till 2034?

Asia Pacific dominated the market with the largest share in 2024. This is mainly due to the swift shift toward CNG and LPG vehicles due to the increased fuel costs and governmental efforts to encourage clean and cost-efficient transportation. Nations such as India, China, and Pakistan are at the forefront of adoption due to their sizable populations, escalating demand for low-emission vehicles, and access to affordable CNG and LPG options for personal and commercial purposes. Favorable regulatory policies, tax breaks, and the growth of refueling facilities in urban and semi-urban areas have further accelerated the adoption of CNG vehicles. Moreover, escalating environmental concerns and the imperative to reduce vehicle emissions are supporting market growth.

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Major Contributors to the Market Growth in Asia Pacific

• India: India leads the region with a significant fleet of CNG vehicles, bolstered by government support, an expanding gas supply network, and an increasing need for affordable, cleaner transport options in both public transport and commercial vehicles.
• China: China is promoting the uptake of LPG and CNG vehicles through stringent emission regulations, subsidies, and the widespread introduction of natural gas buses and taxis in metropolitan areas to mitigate air pollution.
• Pakistan: Pakistan boasts one of the globe's highest counts of CNG vehicles, driven by cost efficiency, government support, and a well-established network for refueling stations in major urban centers.
  

North America’s Significant Growth

North America is expected to witness significant growth during the forecast period. The growth of the market in the region is attributed to heightened environmental awareness, government actions aimed at reducing carbon emissions, and an increasing demand for sustainable transport solutions. This region is experiencing a rise in the use of alternative fuel vehicles within public transport, commercial fleets, and logistics sectors. The U.S. and Canada are making substantial investments in expanding natural gas refueling infrastructures and providing incentives for fleet transformations.

Major Factors for the Market’s Expansion in North America:

• Strict environmental policies and emission standards are encouraging fleet operators and municipalities to shift toward cleaner fuel alternatives like CNG and LPG, which help in lowering greenhouse gas emissions and enhancing air quality.
• Logistics and delivery enterprises are progressively incorporating CNG and LPG vehicles to diminish operational expenses, improve fuel efficiency, and achieve corporate sustainability objectives amid soaring fuel prices and the rising demand from eco-aware consumers.
• Government-supported incentives, grants, and investments aimed at enhancing CNG and LPG refueling infrastructure are making these fuel options more attainable, fostering widespread adoption throughout private, public, and industrial transport sectors.
• Advancements in technology are enhancing engine performance and mitigating emissions, rendering CNG and LPG vehicles more feasible and appealing.

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Segment Outlook

Fuel Type Insights

The CNG segment dominated the CNG and LPG vehicle market with the largest share in 2024. This is mainly due to its extensive use in public and commercial transportation. With significantly reduced emissions and fuel costs when compared to gasoline or diesel, CNG stands out as an appealing option for environmentally conscious governments and fleet operators alike. Numerous countries have invested significantly in CNG infrastructure and provide subsidies or tax incentives, solidifying the prominence of this fuel type in both urban and intercity transport.

The LPG segment is expected to expand at a notable CAGR during the forecast period. LPG presents a cost-effective and cleaner alternative fuel. Its lower conversion expenses render it an enticing choice for passenger vehicles and light commercial fleets. With tightening emission standards, a growing number of consumers and fleet operators are shifting to LPG-fueled vehicles to balance costs with sustainability.

Vehicle Type Insights

The passenger cars segment dominated the CNG and LPG vehicle market with the largest share in 2024, as consumers increasingly prefer cost-effective and environmentally friendly transportation options. As fuel prices rise and emission standards tighten, many urban individuals are turning to cleaner alternatives. There is high adoption of CNG and LPG-powered passenger vehicles, particularly in urban areas where the benefits of lower emissions and reduced fuel expenses are significant for daily travel.

The commercial vehicles segment is projected to grow at the fastest rate during the forecast period due to a growing adoption of CNG and LPG vehicles for logistics, public transportation, and ridesharing. Fleet operators face pressure to cut operating expenses and comply with strict emission regulations, driving a transition to vehicles that utilize alternative fuels. Government incentives, the availability of retrofitting solutions, and the growth of refueling infrastructure are making CNG and LPG increasingly attractive for commercial vehicles used in both urban and intercity travel.

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CNG and LPG Vehicle Market Key Players

• Hyundai Motor Company
• Suzuki Motor Corporation
• Nissan Motor Co. Ltd
• Volkswagen AG
• Honda Motor Company
• Ford Motor Company
• Fiat Automobiles S.p.A.
• Tata Corporation
• AB Volvo
• Traton SE
• Groupe Renault
• General Motors

Recent Breakthroughs in the Global CNG and LPG Vehicle Market:

• In October 2024, Toyota Motor Corporation launched the “JPN Taxi,” a hybrid vehicle featuring a newly developed LPG hybrid system (THS II), which integrates an LPG engine with an electric motor. It achieves a fuel efficiency of 19.4 km/L while significantly reducing CO2 emissions. Produced at the Higashi-Fuji Plant, it includes various safety enhancements, such as the Toyota Safety Sense C package and six SRS airbags.
• In October 2024, Tata Motors announced the commencement of supplying its Tata Prima 5530 S LNG trucks to key green fuel supplier Clean Green Fuel and Logistics Pvt. Ltd. This marks the initial phase of the 150 LNG-powered trucks order, with a handover ceremony having taken place for the first batch, and additional deliveries planned to occur progressively.

Segments Covered in the Report

By Fuel Type

• Compressed Natural Gas (CNG)
• Liquefied Petroleum Gas (LPG)

By Vehicle Type

• Passenger Cars
• Commercial Vehicles

By Region

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East and Africa
  

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