The booming natural gas production, sinking gas prices and Obama administration’s proposed tax credit should reflect a consumer’s increased liking for natural gas vehicles, which sadly isn’t the situation. However, manufacturers have geared up to introduce more NGVs in the U.S. market this year.
Starting July, Chrysler and General Motors Co. will introduce heavy duty pick ups that run on both compressed natural gas as well as gasoline for up to 650 miles. Natural gas as a form of fuel, enjoys a lot of benefits since it comes from domestic sources, lets out only 30% of the greenhouse emissions and costs much less than gasoline. This year, natural gas prices have dropped by nearly 18 percent while gasoline prices are up by 13 percent.
But, NGV manufacturers are supplying vehicles mostly to fleet customers such as local governments, utilities and construction companies. Only one tenth of 1% of the vehicles running are brought by individual U.S. buyers.
U.S. buyers are very slow to adapt to NGV for lack of infrastructure such as fueling stations which are only 1,000 throughout the country. Most of them are not open to public and are operated by government organizations as central refueling stations for fleets.
The only natural gas car sold throughout the United States is the Honda Civic. Honda plans to double the dealers selling natural gas Civics and build nearly 4,000 NGV Civics in 2012, but still the gasoline powered version is more popular among buyers.
Natural gas vehicles are expensive due to additional fuel tanks and spare parts. The price of converting a gasoline car into natural gas powered one can go up to $18,000.
The popularity of natural gas vehicles and hybrid cars is expected to rise only if its price goes down significantly compared to its gasoline version. The Obama administration is pushing ahead an increase in tax credit from the present $7,500 electric vehicle tax credit to an advanced technology vehicle credit of up to $10,000. This could encourage lower prices and demand.
