COLUMBUS, IN – Interest in natural gas (NG) powered Class 8 trucks has slowed in North America, at least in terms of sales, according to a new report from the commercial vehicle industry data provider ACT Research.
Its “Natural Gas Quarterly” says when sales are calculated as a percentage of the total market, the rapidly declining cost of diesel makes the return on investment for adoption of natural gas less lucrative.
Original projections were that 2015 would see a 5% penetration of NG heavy-duty trucks, but based on 2014 actual results and the sharp drop in oil prices starting in fourth quarter of 2014 the report calls that optimistic.
“With the price differential between diesel and natural gas narrowing, the return-on-investment to convert from diesel to natural gas is moving in the wrong direction: payback periods are lengthening,” said Ken Vieth, ACT’s senior partner and general manager. “However, this doesn’t mean the adoption of NG fuel has stopped or that there are no new developments that might lead to a future uptick in NG truck orders.”
Vieth explained that infrastructure build-out continues, as does equipment research and development efforts and financing partnership opportunities.
ACT Research said it continues to see growth for the adoption of natural gas as a fuel for HD vehicles in the U.S., but doesn’t expect to see double-digit sales expansion on the horizon in the next few years.
As for Canada, Steve Tam, vice president of ACT’s commercial vehicle sector, told Today’s Trucking there currently appears to be very little interest or activity in natural gas in the country, and based on the data ACT has seen, less than 5% of the natural gas powered trucks manufactured are destined for Canada.
“My sense is that the operating models of Canadian trucking probably vary dramatically from those in the U.S. Given the geographical and demographic differences, there is probably a lot more long haul freight,” he said. “Duty cycles tend to be more severe as well. It seems like this would have an advantage as far as access to fuel and a much less complicated infrastructure. It could be that the distribution systems just are not there to support natural gas adoption.”
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