The medium duty (MD) and heavy duty (HD) truck and bus market will show strong recovery globally after a major dip in 2020 due to the COVID-19 crisis which will affect production as well as sales across regions. The crisis will also have a profound effect on the adoption of natural gas (NG) powered truck and buses, with China and Europe witnessing almost a 60% and 50% decline in MD-HD truck sales respectively in 2020. North America (NA) which posted historic high MD-HD truck sales in 2018 and 2019 will also be hit considerably. With China already recovering from the crisis and the push by governments in Europe and NA to revive the economies, it is expected that a positive impact will be felt on the NG market after 2021.

The global NG MD and HD truck market is expected to grow to ~490,000 units in 2030 with a compound annual growth rate (CAGR) of 11.6%. India and South America will be the highest growing markets between 2019 and 2030 with a CAGR of 30.2% and 31.8% respectively.

Stringent emission regulations, volatility in crude oil prices, and technology development which effectively reduce the total cost of ownership (TCO) of NG commercial vehicles (CVs) are some of the key factors driving the adoption of NG as a fuel for these vehicles. Abundance of NG reserves and LNG trade will lead to low prices of NG in Europe and North America. Asia will also benefit as there will be an oversupply of the fuel. In China, NG pricing is transforming from a cost plus pricing approach to market pricing, with the creation of gas spot trade exchanges at Chongqing and Shanghai. Renewable Natural Gas (RNG) produced from a number of sources will be the key to increasing the adoption of NG vehicles. Some countries in Europe are already on the way with more than 90% of the NG vehicles running on RNG. Use of RNG in NG vehicles is expected to increase to almost 50% by 2030.

Compressed Natural Gas (CNG) will be the most preferred type of NG fuel; however, most NG trucks in China run on Liquefied Natural Gas (LNG), which is most profitable for long-haul applications. Spark ignition (SI) technology will boost its market position due to its low cost and wide installation base, thus facilitating future development. High Pressure Direct Ignition (HPDI) technology will also increase its penetration into LNG CI trucks in the long-haul segment.

The NG MD and HD truck & bus market also faces stiff competition from the electric equivalents. MD and HD truck OEMs are making giant strides towards electrification after being slow and reticent in adopting the technology earlier. The adoption of NG powertrains is expected to show high growth rates till 2025, after which it is expected to drop. The global MD and HD bus market faces stiff competition from electric buses, especially in China. With many European and US bus OEMs looking at the electrification route, these regions will also witness slower growth rates during the forecast period.