There are growing number of major OEM programmes and energy producers investing in programs to develop and promote the sale of vehicles using compressed natural gas (CNG) and dual-fuel gasoline (petrol)-CNG powertrains, which should generate significant growth in the powertrain type between now and the end of the decade. The Fiat-Chrysler group is at the forefront of these programmes, with the company looking to offer CNG variants of all its mainstream model range. The company's chief technical officer (CTO) Harald Wester is no fan of electric vehicles (EVs) as a way of reducing overall CO2 emissions, claiming that the technology is only as clean as the method used to create the electricity which charges the batteries. In a recent interview with Autocar Wester said, "Diesel and CNG are the more obvious answers if CO2 is the focus. Both are more viable answers than hybrid. If they gave us a CO2 target instead of imposing technology then we would go that way". The company is launching a dual-fuel variant of all its Fiat-branded cars, capable of being fuelled by both CNG and gasoline. According to a report in the Economist, these vehicles are capable of generating significant real-world fuel cost savings for their owners, with Fiat claiming that a 700-km journey can be completed on EUR22 (USD28) worth of CNG whereas the same journey completed on gasoline would cost in the region of EUR65.
The Volkswagen (VW) Group is also looking at CNG cars, although its system approaches the technology in a different way. VW's Audi brand showed its A3 Sportback g-tron concept at the Geneva Motor Show earlier this year. The g-tron's powertrain comprises two gas tanks that fuel a conventional internal combustion engine. The two tanks can be fuelled by gas stored at Audi's new e-gas facility in the town of Werlte or by conventional Compressed Natural Gas (CNG). Audi own process produces gas from renewable energy through the electrolysis of water, making hydrogen and oxygen, and the reaction of the hydrogen with CO2 to produce a synthetic methane that Audi calls e-gas. The e-gas is chemically identical to natural gas. Production of the gas began in early 2013 and will feed into the German gas network from the middle of this year. Audi will operate a number of prototypes that will each cover 15,000 km a year in trials as it looks to prove the technology in real world driving situations. Audi claims that the emissions of the model when using gas are less than 30 g/km of CO2.
In the US, the impetus behind CNG is coming more from energy companies than OEMs. General Electric and Honeywell are developing systems that will offer domestic householders inexpensive, home-refilling kits so CNG car owners would have the capability to refill their cars' gas tanks from their domestic supply. At the same time a consortium of North American energy companies, called America's Natural Gas Alliance, a trade group representing more than two dozen North American oil and gas companies, is planning to demonstrate "bi-fuel" versions of popular vehicles retrofitted to run on CNG, and using a conventional gasoline tank to extend their range in an effort to market and promote the technology across the US. According to a Dow Jones report converted existing vehicles from Ford, Chrysler and four other OEMs will be demonstrated by the group. Chrysler already offers a CNG-powered pick-up, although the company as yet has no plans to offer a passenger car variant using the technology. However, given the enthusiasm of parent company Fiat for the technology in Europe, this could change.
Outlook and implications
The number of CNG and CNG dual-fuel light vehicles being manufactured on the global market is stet to roughly double in the decade between 2010 and 2020 according to the latest IHS Automotive powertrain forecast, with the market at the level of around 1.2 million units by that point. This still represents a relatively small overall component of the combined global light vehicle market, at about 1.2% of the combined market, with conventional gasoline and diesel-powered vehicles still dominating the market by the end of the decade. However, to put things in context, it means that for all the hype surrounding EVs, CNG and CNG dual-fuel light vehicles are forecast to still be considerably more popular than EVs by the end of the decade on a global basis, with EV light-vehicle sales forecast at just under 740,000 units by 2020. There is much potential for CNG to expand as a mainstream fuel type, especially in the US as a result of the fracking boom. However, as ever, the availability of the associated infrastructure is, as ever, key to any expansion in the fuel type. As a result the home-fuelling technologies being developed GE and Honeywell are potentially very interesting, while there are also reported to be moves in the US liquid natural gas (LNG) networks being installed on the US's highways systems to fuel trucks. These could easily be adapted to supply a CNG fuelling network in the country for light vehicles. CNG is also attractive for OEMs like Fiat-Chrysler as conventional gasoline internal combustion engine (ICE) technology can be easily adapted to run on the fuel at a fraction of the cost of developing EV of hybrid powertrains, therefore it is a cost-effective way for OEMs to bring down range-average emissions.
| Analyst Contact Details: | Tim Urquhart |
