In The News
Declining cost of diesel slows growth of NG HD vehicles
COLUMBUS, Ind. — NG powered Class 8 truck and bus sales have slowed when calculated as a percentage of the total market, according to a new report from ACT Research.
The "Natural Gas Quarterly" attributes the rapidly declining cost of diesel with making the return on investment for adoption of natural gas less lucrative.
Original projections were that 2015 would see a 5 percent penetration of NG heavy-duty trucks, but based on 2014 actual results and the sharp drop in oil prices starting in fourth-quarter 2014, the report calls that optimistic.
"With the price differential between diesel and natural gas narrowing, the ROI 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 said that infrastructure build-out continues, as does equipment research and development efforts and financing partnership opportunities.
ACT Research 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, he said.
The "Natural Gas Quarterly" provides information on the current status of multiple factors that impact a decision to adopt natural gas.
Included is a "dashboard gauge" that looks at the fuel price spread, public heavy-duty NG fueling infrastructure, NG equipment and the quantity of NG heavy-duty truck sales.
Vieth said that ACT has developed an NG equipment payback index as a quick reference tool for fleets evaluating a switch from diesel to natural gas and has added the index and an interactive directional gauge to its free, online NG Fuel Payback Calculators.
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