CNG cars haven’t run out of fuel yet even as focus increases on hybrid, EVs

Even as car manufacturers are focusing on hybrid and electric vehicles, they are also invested in launching CNG variant of various models, mainly because of low running cost it offers to the consumers.

The past week saw two major CNG car launches. Hyundai Motor India launched its Exter micro SUV with CNG fuel options along with the petrol variant. The country’s largest passenger vehicle manufacturer, Maruti Suzuki also brought out its S-CNG technology in the compact SUV Fronx.

With these two models, now there are as many as 23 CNG passenger vehicle models in the market—14 by Maruti Suzuki, four by Tata Motors, three by Hyundai and two by Toyota Kirloskar Motor.

Maruti Suzuki was the earliest entrant into the CNG space in 2010.

Since then, it has sold 1.48 million CNG cars. Hyundai launched its first CNG car in 2018, and has sold about 170,000 units. Tata Motors entered this space last year and has sold more than 65,000 cars, and Toyota was the latest to launch CNG models.

As per data sourced from the Vahan portal, sales of CNG cars grew almost 41% in FY23 —from 226,547 units in FY22 to 318,752 in FY23.

Auto analysts said low running costs of a CNG car (despite rising prices of the fuel) and high petrol/diesel prices are making a section of car buyers shift to CNG, and OEMs are gearing up to meet that demand.

In the case of Maruti Suzuki and Tata, CNG is also a replacement for diesel engines —Maruti Suzuki exited the diesel engine space completely in 2020 when BS6 emissions kicked in—and Tata Motors has stopped selling smaller-capacity diesel engines.

Even though CNG prices have increased 41% in less than two years, it still offers the lowest running cost amongst conventional fuels. A small CNG car’s running cost is about Rs 2 per km, compared to Rs 5-7 per km for petrol and diesel cars.

“That’s why CNG cars are in good demand, making carmakers turn to this fuel to replace their diesel portfolio,” an industry analyst said.

What has also helped the uptake of CNG vehicles is the rising number of CNG stations. As per data sourced from Statista, by December 2022 India had as many as 5,040 CNG stations.

Som Kapoor, EY India automotive, future of mobility leader (consulting), and partner, told FE that another reason OEMs are showing interest in CNG is low development costs.

“Significant modifications aren’t required to turn a petrol engine into a CNG,” he said. That explains the reason why there has been a spate of CNG launches in just three years after April 2020.

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