Alternative Fuel Vehicles Market Estimated to Surpass $892.57 Billion Mark by 2026
Jun 10, 2021
The global Alternative Fuel Vehicles Market is estimated to surpass $892.57 billion mark by 2026 growing at an estimated CAGR of more than 12.9% during the forecast period 2021 to 2026. Alternative fuel vehicle market is witnessing fast growth due to various driving factors including the increasing stringent regulations issued by various regulatory bodies to control emissions. Alternative fuel vehicle refers to the vehicles that use substances other than traditional gas and diesel as their source of energy. These alternative sources include solar, biodiesel, compressed air, liquid natural gas and others. The alternative fuel vehicles facilitate convenience, enhanced energy security, improved performance an above all reduced fuel costs, thereby boosting its demand among various industries.
Alternative Fuel Vehicles Market Segment Analysis – By Type
Alternative Fuel Vehicles are driven by the significant adoption of LPG in automotive sector. LPG is significantly used, particularly in light commercial vehicles market. As of 2019, Europe has over 15 million vehicles that are powered by Autogas (LPG) with over 46,000 refueling stations across various countries. Italy is the largest market for the LPG and other alternate fuel vehicles in Europe. In 2019, Italy has sold the highest number of natural gas vehicles in European market of about 37,406 and this market is not significantly impacted by the launch of the electric vehicle. In 2018, Eni SpA has announced that it will invest $7.71 billion in Italy for the next four years out of which $1.1 billion is towards green activities including the decarbonisation process such as R&D and so on. Such investments towards decarbonisation include reduced usage of conventional fuel vehicles and also the development and usage of alternate fuel vehicles. Therefore the increased investments due to the environmental impact in Italy and also the European region is boosting the alternative fuel vehicle market.
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Alternative Fuel Vehicles Market Segment Analysis – By Application
The transportation sector dominates the alternative fuel vehicles market driven by significant adoption in commercial vehicles. This segment is projected to remain the largest market as heavy commercial vehicles in particular are becoming a growing market for technology. Alternate fuel vehicles are majorly being deployed for public transportation applications owing to their lower carbon emissions and the significant environmental impact. Government bodies are planning to decrease the crude oil imports thereby upsurge in the demand for alternative fuel vehicles is increasing and driving the alternative fuel vehicle market. In 2018, Indian Government has stated that it is aimed in enhancing $15.47K of methanol economy to $281.35M in order to promote cleaner fuel and also cutting down the higher crude oil import bills, thereby boosting the alternate fuel vehicle market.
Alternative Fuel Vehicles Market Segment Analysis – By Geography
North America holds the largest market share due to increased initiatives in the region in terms of investments and regulations by organizations such as Alternative Fuel Data Center. The alternative fuel vehicle market is witnessing a significant growth rate accounted to 15.7% during the forecast period 2019-2025 in APAC attributed to the emergence of large number of initiatives such as Clean Air Asia’s Clean Fuels and Vehicles (CFV) Program and increasing adoption of high-end technologically advanced emission systems for vehicles in countries such as China and Japan. In 2019, Songuo Motors has introduced its revolutionary NeuWai brand and its new passenger car, truck, SUV, motorcycle and scooter models that are incorporated with advanced technology and alternative-fuel drivetrains. Such product launches are set to propel the growth of alternative fuel vehicle market.
Alternative Fuel Vehicles Market Drivers
Demand for CNG Buses
The rising demand for buses that are alternative fuel-based is driving market growth. As of 2019, over 11,000 buses with the fuel as compressed natural gas are operated throughout the major cities in U.S. and moreover CNG has an advantage that even during disastrous situations such as floods, hurricanes and so on the supply is not disrupted as it is supplied through the underground pipe systems. Owing to the advantages of alternate fuels many national parks in the U.S. employ the buses with the alternate fuels such as CNG, LPG, and so on thereby boosting the alternative fuel vehicle market during the forecast period 2021-2026.
Increasingly Stringent Regulations
The increasing number of stringent regulations are contributing significantly towards boosting the alternative fuel vehicle market growth. In 2018, California Air Resources Board has introduced the Multi-State Zero Emission Vehicle (ZEV) Action Plan for 2018-2021 aiming to support the successful implementation of the states; ZEV programs. Moreover, the European Directives have restricted the amount of regulated pollutants that can be emitted by new motor vehicles and engines sold in the European Union. As a result of these regulations, there has been a surge in demand and adoption for alternative fuel vehicles globally.
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Alternative Fuel Vehicles Market Challenges
Lack of Infrastructure
One of the major challenges faced by the alternative fuel vehicle market is the incompatibility of the existing petroleum and natural gas pipeline networks and refueling stations with the alternative fuels that are used to power AFVs including ethanol, hydrogen, and biodiesel. Parallel pipeline and refueling station infrastructure needs to be developed in order for the alternate fuel vehicles to be predominantly deployed as public transportation.
Alternative Fuel Vehicles Market Landscape
Product launches, acquisitions, and R&D activities are key strategies adopted by players in the Alternative Fuel Vehicles Market. Ford, Renault, General Motors, Honda, Volkswagen, Hyundai, Toyota and others are considered to be the key players of the Alternative Fuel Vehicles Market.
In 2019, Songuo Motors has introduced its revolutionary NeuWai brand and its new passenger car, truck, SUV, motorcycle and scooter models that are incorporated with advanced technology and alternative-fuel drivetrains.
In 2020, Maruti Suzuki launched the Celerio vehicle model with an alternative fuel CNG based variant.
shift towards clean transportation and the increased rate of depletion of oil and petroleum reserves globally will drive market adoption.
Increasing usage and growth of alternative fuels in transportation is driven by the concern over the level of emissions from the use of fossil fuels.
Increasing oil prices, increasing dependence on foreign countries for oil as well the environmental benefits of alternative fuels have prompted the growth of alternative fuels.
Related Reports :
A. Fuel Additives Market
B. Methanol Market
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