🚚 Natural Gas Trucks Market Expected to Continue Its Booming Trend 🔥

Recently, the National Development and Reform Commission (NDRC) issued the "Natural Gas Utilization Management Measures" (hereinafter referred to as the "Management Measures"), which clearly propose that transport vehicles such as cargo trucks, inter-city buses, and buses using liquefied natural gas (LNG) as fuel are included in the "Priority Category" projects. This implies that natural gas trucks remain a key vehicle type supported by the government. This clear stance from the NDRC undoubtedly injects new vitality into the rapidly developing natural gas truck market.

📜 Policy Issuance is Timely 🕒

In recent years, natural gas trucks have become the main force in the field of road logistics, thanks to their low emissions and high efficiency. Since 2023, domestic natural gas heavy trucks have been advancing rapidly, with an annual sales volume of 152,000 vehicles, a year-on-year increase of 307%, and the market penetration rate has risen to 16.7%, setting a historical high. At the same time, major commercial vehicle companies have also increased their investment and layout, expanding production capacity and optimizing marketing strategies to seize a larger market share.

Entering 2024, the natural gas heavy truck market continues to maintain a strong growth momentum, with a cumulative sales volume of 92,500 vehicles from January to May, a year-on-year increase of 127%. However, against the backdrop of a positive market trend, a rumor about an increase in road maintenance fees for gas vehicles has spread in the industry. Although no authoritative department has issued relevant policy documents or official notices to confirm the authenticity of this news, the emergence of the rumor undoubtedly brings some negative impact to the natural gas truck market.

"The introduction of the 'Management Measures' is timely, giving the natural gas truck market a 'reassurance'." said Yang Jinguo, Deputy General Manager of China Auto Brothers and Founder of China Auto Truck Brothers Club. As a representative of clean energy vehicles, natural gas trucks play an important role in promoting the transformation of the national energy structure and energy conservation and emission reduction. Previously, the "Natural Gas Utilization Policy" (Order No. 15) issued by the NDRC had already included natural gas trucks in the "Priority Category". In the newly issued "Management Measures", natural gas trucks are once again listed as "Priority Category" gas use projects, showing the government's firm position on continuous encouragement and priority development. More importantly, the "Management Measures" clearly propose that for priority gas use projects, local people's governments at all levels and relevant departments are encouraged to provide policy support in planning, land use, financing, finance and taxation, etc. This means that natural gas vehicles are expected to enjoy tax incentives and even tax reduction policies, which to some extent eliminates the market's worries about the possible increase in road maintenance fees for gas vehicles.

🚀 Boosting End Market Demand 🛒

Overall, the "Management Measures" aim to "regulate the use of natural gas, optimize the consumption structure, improve the efficiency of utilization, promote conservation and ensure energy security", clarifying the overall principles of natural gas utilization, scope of application, management departments and support directions, and further guiding the standardized and effective development of the natural gas market.

Compared with the past, the "Management Measures" inject a stronger impetus into the development of natural gas, coupled with the accelerated advancement of the natural gas price linkage mechanism, the supply and demand situation of the natural gas market is expected to see significant improvements. This positive change will provide strong support and catalytic effect for the release of downstream demand, and further promote the promotion and application of natural gas trucks, and stimulate the end market's enthusiasm for purchasing gas vehicles.

It is not difficult to find that the economic advantage of natural gas trucks is mainly based on the difference between oil and gas prices. Just looking at the fluctuation of LNG prices, since the beginning of 2023, the LNG price has dropped from nearly 7,000 yuan/ton in January to 3,668 yuan/ton in August. The gas price has been falling, making the economic advantage of natural gas heavy trucks more prominent, and attracting more and more transport practitioners to choose. However, it is worth noting that LNG is not only used in the field of vehicles but also has a large number of industrial uses, and it is a peak-regulation commodity, and its price is determined by a variety of factors. In addition to national policy regulation, international situations and market supply and demand changes can also cause fluctuations in natural gas prices. In view of these uncertainties, many transport practitioners remain vigilant about the potential rise in LNG prices, worried that it may have adverse effects on their own production and operation. Now, the government has released a positive signal, encouraging the priority use of natural gas trucks, and this policy orientation will undoubtedly inject strong momentum into the vigorous development of the natural gas truck market in the second half of the year.

🌟 Future Development Prospects are Promising 🚀

Thanks to the significant advantage of the oil-gas price difference, the natural gas truck market is entering a period of strong upward opportunity. The industry is also optimistic about the future development prospects of the market, firmly believing that the natural gas truck market will continue to maintain a strong growth momentum.

Jiang Chunhui, Chief Researcher of the Low Temperature Center of Zhejiang City College, said that in 2024, resource allocation is beneficial to the natural gas truck industry, promoting the continuous release of market demand. On the one hand, the global natural gas supply and demand have entered a stable development stage, and prices are becoming more rational, especially the strengthening of LNG trade, which has laid a solid foundation for further expanding the coastal market; on the other hand, market practice has verified that "gas instead of oil" is the most valuable application field of LNG, and its cost-effectiveness stands out among many alternative solutions. In addition, many car companies have keenly captured market trends and have made LNG heavy trucks a strategic focus, which will drive the vigorous development of upstream and downstream enterprises in the industrial chain such as LNG tank manufacturers and promote the continuous high-speed growth of the natural gas truck market. Based on the above analysis, Jiang Chunhui predicts that the sales volume of natural gas heavy trucks in 2024 is expected to reach a new peak, with an annual sales volume of more than 250,000 vehicles, a year-on-year increase of about 90%, and the market penetration rate will be further improved.

Regarding the market trend of natural gas heavy trucks in 2024, major mainstream heavy truck companies are also generally optimistic. Among them, Shaanxi Auto Group believes that given the current low freight rates and the expected stability of the oil-gas price difference, natural gas heavy trucks are expected to further achieve a structural replacement of diesel models. China National Heavy Duty Truck Group predicts that the annual sales volume of natural gas heavy trucks in 2024 will reach 230,000 to 250,000 vehicles, and the market share is expected to reach 30%. Among them, long-distance standard load transportation, coal transportation, sand and stone material transportation, express delivery and dangerous goods transportation and other sub-segments will be key application scenarios for natural gas heavy trucks.

It can be clearly seen from this year's new car announcements that natural gas trucks are gradually penetrating and transforming into the express logistics field. At the same time, high power and long endurance have become the symbolic features of this type of vehicle. In addition, in terms of regional distribution, the natural gas truck market is showing a trend of accelerating expansion from north to south and from west to east, which also indicates that its popular application across the country is continuously deepening.

In general, driven by policy dividends and market demand, the penetration rate of the domestic natural gas truck market is expected to be further improved. However, for transport practitioners, in the complex market environment, they still need to maintain a clear and rational thinking, and the purchase of natural gas models must have long-term plans, not only considering the immediate benefits, and need to comprehensively consider their own needs and actual transportation situations, to more comprehensively assess the market situation and investment risks, and choose their own solutions to avoid operational difficulties due to blindly following the trend.

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