Trucking News Online

Lower Fuel Prices Put the Brakes on Sales of NG-powered Class 8 Trucks

July 23, 2015 By: Trucking News Staff Tags: Fleet Management, Fuel, News
Lower Fuel Prices Put the Brakes on 2015 Sales of NG-powered Class 8 Trucks

Natural gas-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.

ACT 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 natural gas-powered heavy-duty trucks, but based on 2014 actual results and the sharp drop in oil prices starting in the fourth quarter of last year, 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. He explained 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.

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 added 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 (calc.actresearch.net).