CNG and LPG Vehicle Market Growth Drivers, Challenges and Opportunities

CNG and LPG Vehicle Market Size, Trends and Forecast

The CNG and LPG market is projected to reach USD 6.75 billion by 2034, expanding from USD 4.15 billion in 2025, at an annual growth rate of 4.93% during the forecast period from 2025 to 2034.

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Introduction

The CNG and LPG vehicle market is a crucial segment of the automotive industry. This industry deals in manufacturing and distribution of LPG and CNG vehicles around the world. There are various types of vehicles developed in this sector including CNG-based passenger cars, LPG-based passenger cars, CNG-based commercial vehicles, LPG-based commercial vehicles and others. These vehicles are integrated with different types of engine systems consisting of dedicated system, bi-fuel system, dual fuel system and some others. The rising prices of gasoline and diesel in different parts of the world has contributed to the overall industrial expansion. This market is expected to rise significantly with the growth of the hybrid vehicles industry in different parts of the world.

• According to the U.S. Department of Energy, the gasoline prices in the U.S. in 2020 was US$ 2.17 per gallon that increased to US$ 3.5 per gallon in 2023.

Highlights of the CNG and LPG Vehicle Market

• Asia Pacific held the highest share of the CNG and LPG vehicle market.
• North America is expected to grow with a significant CAGR during the forecast period.
• By vehicle type, the passenger car segment held the largest share of the market.
• By vehicle type, the LCVs segment is anticipated to rise with a notable CAGR during the forecast period.
• By fuel type, the CNG segment dominated this industry.
• By fuel type, the LPG segment is predicted to rise with a considerable CAGR during the forecast period.
• By sales channel, the OEM segment led the industry.
• By sales channel, the retrofitting segment is likely to grow with a significant rate during the forecast period.

Key Metrics and Overview

CNG and LPG Vehicle: Stats and Figures

• According to the Convergence Now, around 1.1 million CNG vehicles is expected to reach 2025.
• According to the United States Department of Transportation, the average price of gasoline in the U.S. was around US$ 3.59/ gallon in March 2025.
• According to the Bureau of Transportation Statistics (BTS), the diesel prices in the U.S. reached US$ 3.68 in February 2025.
• According to the Our World in Data, the global crude oil prices was around US$ 519.80/per cubic meter during 2023.

Vehicle Type Insights

The passenger car segment held the largest share of the market. The rising demand for affordable cars in mid-income countries such as India, Vietnam, Egypt, Laos and some others is driving the market growth. Additionally, the increasing prices of traditional fuels such as gasoline and diesel has increased the demand for economic alternatives, thereby fostering the industrial expansion. Moreover, rapid investment by several automotive companies for developing CNG-based passenger cars along with technological advancements in LPG industry is further driving the growth of the CNG and LPG vehicle market.

• In April 2025, Honda launched Elevate CNG in India. This vehicle is equipped with 1.5-litre engine that is expected to deliver a superior mileage.

The LCVs segment is anticipated to rise with a notable CAGR during the forecast period. The growing demand for LCVs from several end-users including logistics, construction, e-commerce, utilities and some others has boosted the market growth. Additionally, the increasing adoption of LNG-based LCVs by fleet operators to minimize operational costs is further adding to the industrial expansion. Moreover, numerous partnerships and collaborations among automotive companies for developing CNG-based LCVs is projected to boost the growth of the CNG and LPG vehicle market.

• In January 2025, Mahindra launched Veero CNG. Veero CNG is an LCV designed for transporting goods at short distances.

Fuel Type Insights

The CNG segment dominated this industry. The growing demand for fuel-efficient vehicles among middle-class people has boosted the market expansion. Additionally, the rising investment by automotive brands for developing high-performance CNG engines for passenger cars and commercial vehicles is further adding to the industrial growth. Moreover, several companies such as Maruti Suzuki, Ashok Leyland, Tata Motors, Nikki Co. Ltd., General Motors Co. and some others is projected to foster the growth of the CNG and LPG vehicle market.

• In August 2023, Ashok Leyland launched CNG-powered 18.5T long-haul truck. This truck is expected to provide a driving range of around 1150 kms on full tank.

The LPG segment is predicted to rise with a considerable CAGR during the forecast period. The rising demand for autogas vehicles to enhance the driving range of vehicles has boosted the market growth. Also, the growing adoption of factory-fitted LPG vehicles by fleet operators due to its advantages such as optimized performance, easy maintenance, high safety standards and some others ins likely to shape the industry in a positive direction. Moreover, continuous research and development related to LPG vehicles coupled with numerous government initiatives aimed at adopting LPG vehicles is expected to drive the growth of the CNG and LPG vehicle market.

• In September 2024, the government of India announced an initiative for LPG vehicles. This initiative is aimed at increasing awareness about LPG vehicles across this country.

Sales Channel Insights

The OEM segment led the industry. The availability of CNG vehicles and LPG trucks in OEM outlets is driving the market expansion. Additionally, the growing consumer preference towards warranty enabled vehicles is further adding to the industrial growth. Moreover, the precision and quality delivered by OEMs is way better as compared to aftermarket sector that in turn is expected to drive the growth of the CNG and LPG vehicle market.

The retrofitting segment is likely to grow with a significant rate during the forecast period. The rise in number of aftermarket service centers in different parts of the world has boosted the market expansion. Additionally, surge in demand for fuel-efficient among middle class population has enabled them to integrated CNG tanks from aftermarket sector, thereby fostering the industrial growth. Moreover, the growing investment by aftermarket service centers to deploy advanced machineries and skilled labors for enhancing CNG integration process is further anticipated to foster the growth of the CNG and LPG vehicle market.

Geographical Insights

Asia Pacific held the highest share of the CNG and LPG vehicle market. The growing demand for fuel-efficient vehicles in countries such as India, Japan, China, South Korea and some others has boosted the market expansion. Additionally, the rapid adoption of CNG-powered taxis by ride-hailing companies such as Uber, Rapido, Ola and some others is playing a positive role in the industrial growth. Moreover, the presence of various market players such as Tata Motors, Maruti Suzuki, Honda Motor Company, Hyundai Motor Group and some others is projected to foster the growth of the CNG and LPG vehicle market in this region.

China is the major contributor in this region. In China, the market is generally driven by the rising demand for CNG-powered LCVs along with well-established network of refueling stations. Additionally, the presence of several CNG vehicle manufacturers such as Shacman, Zhongtong, JAC and some others is driving the market growth in this nation.

North America is expected to grow with a significant CAGR during the forecast period. The growing demand for eco-friendly trucks in countries such as Canada and the U.S. has boosted the market growth. Also, the technological advancements in automotive sector coupled with rapid investment in CNG infrastructure by private-sector entities is playing a vital role in shaping the industrial landscape. Moreover, the presence of several market players such as General Motors Co., Ford Motor Co., Chevrolet and some others is driving the growth of the CNG and LPG vehicle market in this region.

Industry Leader Announcement

• In April 2025, Tarun Garg, the Chief Operating Officer of Hyundai Motor India made an announcement stating that, “At Hyundai, we are committed to offering smart mobility solutions that cater to the evolving needs of our customers. The introduction of the EX-variant in the Hyundai Exter Hy-CNG Duo lineup is a testament to our customer-centric approach, ensuring that smart mobility is accessible to a wider audience, with its efficient bi-fuel technology, enhanced safety features and Hyundai's signature reliability, the Exter Hy-CNG Duo EX variant offers an optimal balance of affordability and efficiency. As we continue to expand our green mobility portfolio, we remain dedicated to providing innovative and value-driven solutions to our customers."

Competitive Landscape

The CNG and LPG vehicle market is a rapidly developing industry with the presence of a several dominating players. Some of the prominent companies in this industry consists of Maruti Suzuki, Nikki Co. Ltd., Kion Group, Hyundai Motor Company, IVECO, Mahindra & Mahindra, MAN SE, AC Spolka, Landi Renzo S.P.A and some others. These companies are constantly engaged in developing vehicles based on LPG & CNG and adopting numerous strategies such as business expansions, partnerships, acquisitions, collaborations, launches, joint ventures, and some others to maintain their dominant position in this industry. For instance, in March 2025, Iveco launched S-Way CNG 6x2 tractor. This vehicle is developed in a collaboration between Iveco and Astra Vehicle Technologies. Also, in September 2024, Maruti Suzuki launched Swift CNG in India. This car is expected to deliver a mileage of around 32.85 km/kg.

Recent Developments

• In April 2025, Hyundai Motor India launched Exter CNG. Exter CNG is equipped with a 1.2-litre Kappa petrol engine that delivers superior engine performance.
• In September 2024, Tata launched Nexon CNG in India. Nexon CNG is a compact SUV that delivers a mileage of around 17.44 km/kg.
• In March 2023, Toyota launched an LPG HEV taxi. This taxi is designed for providing fuel-efficient traveling across Thailand.

CNG and LPG Vehicle Market Segments

By Vehicle Type

• Passenger Car
• LCV

By Fuel Type

• CNG
• LPG

By Sales Channel

• OEM
• Retrofitting

By Region

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