Fuels Institute says alternative fuels are slowly gaining traction

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Updated Nov 25, 2013

The growth of vehicles running on alternative fuels will accelerate over the next decade, but diesel fuel- and gasoline-powered vehicles will continue to dominate market share, according to “Tomorrow’s Vehicles: What Will We Drive in 2023?” a new report released by the Fuels Institute.

 “On the surface, it may not seem that significant change is occurring, because gasoline and diesel fuel-powered vehicles will continue to dominate the vehicle fleet in 2023, but alternatives are gaining traction,” says John Eichberger, executive director of the Fuels Institute. “Consumers appear to be more open to alternatives than ever before and vehicle manufacturers are offering a wider variety.”

According to the report, medium- and heavy-duty vehicles represent a near-ubiquitous 99.4 percent of the market in 2012 but will drop to between 94 and 97 percent in 2023. The report says the primary competition to diesel fuel in the medium- and heavy-duty markets will be natural gas.

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The report says natural gas is projected to grow to 3.8 percent in the commercial fleet market, but the high cost of installing natural gas facilities at retail and the cost of vehicle conversion or production will be factors limiting additional growth by 2023.

Given that there are more than 250 million vehicles on the road today, it will take years of strong sales of alternative fuel vehicles to reshape the country’s vehicle fleet, Fuels Institute says. In addition, a variety of developments — including cost reductions for alternative-fuel vehicles, conveniently available refueling options, expanded vehicle range and overall consumer familiarity and confidence with new fueling options — will need to occur before alternative-fueled vehicles can capture significant market share.

“We need to ask, and answer, some tough questions so that the vehicles and fueling markets can develop together and convert consumers to new type of vehicles,” says Eichberger.

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The Fuels Institute, founded by the National Association of Convenience Stores (NACS), is a non-profit, research-oriented think-tank dedicated to evaluating the market issues related to consumer vehicles and the fuels that power them. It commissioned Navigant Research to provide a forecast of the vehicles market through 2023 that captures approximately two generations of vehicle development, providing a reliable look into the future but not reaching so far into the future as to be rendered unreliable.