In the May edition of their commercial truck Guidelines report, ATD/NADA Commercial Truck analysts looked at the state of the natural gas market. Although there are not many in supply since few are in demand, it is slowly developing in class 6-8 commercial trucks.
Multiple observations illustrate the chicken-egg scenario for both buyers and consumers are hesitant to shift that direction without assurance of the long-term value. According to Chris Visser, senior analyst, “production needs to ramp up for price to come down, but until price comes down demand won’t increase.”
Perhaps the other major factor contributing to the low demand for natural gas is the low price of diesel. Thanks to fracking, the US is now the world’s largest producer of crude oil; a trend that will likely stand until the 2030’s. Despite the US also being the world’s largest producer of natural gas, the low price of natural gas alone is not adequate enough to make the math work out for most trucking operations.
Visser believes there is one factor that could rekindle interest in natural gas stating, “There’s a moderately good chance that the Commerce Department will relax export restrictions on domestic crude.”
For now, analysts will examine the few used natural gas trucks entering the secondary market, which they predict will penetrate 15-20% by 2020.
NADA has assured that it will continue to closely monitor our incoming sales data from Manheim, ADESA, regional auctions, individual dealers, dealer groups, and OEM’s for sales of NG trucks. For more info and the full 2015 May Guidelines report from ATD/NADA Official Commercial Truck Guide, visit www.nada.com/b2b.