More natural gas vehicles hitting the market
DETROIT—More natural gas-powered vehicles will hit the market soon, as rising gasoline prices, booming natural gas production and proposed tax credits make them a more attractive option. But they're a long way from being a common sight in U.S. driveways.
Chrysler will sell a Ram 2500 Heavy Duty pickup that runs on compressed natural gas starting in July. The truck has both a gasoline tank and a natural gas storage tank, and its engine shifts seamlessly between the two power sources. The truck can run for 255 miles on natural gas and another 367 miles using gasoline.
Chrysler will have competition. Late this year, General Motors Co. will sell natural-gas versions of two pickups -- the Chevrolet Silverado and GMC Sierra 2500 HD. The GM trucks will run on gasoline and natural gas for 650 miles.
Natural gas is appealing for a lot of reasons. It comes from domestic sources, for those concerned about importing oil. It produces 30 percent fewer greenhouse gas emissions than traditional gasoline or diesel. And it costs less than gasoline. Natural gas prices have dropped 18 percent so far this year, while regular gas prices are up 13 percent.
But U.S. buyers have been slow to adopt natural-gas vehicles, which make up less than one-tenth of 1 percent of the vehicles on American roads. Even the newest trucks aren't intended for average buyers. They're work trucks, capable of plowing snow and towing three tons or more. Chrysler will only sell its natural-gas Ram to fleet customers like local governments, utilities and construction companies. GM anticipates that 90 percent of its sales will be to fleets.
Here are some reasons that U.S. buyers have been slow to adopt natural-gas vehicles:
-- Lack of fueling stations. There are around 1,000 natural-gas fueling stations in the U.S., but only half of them are open to the public. Most are operated by local governments or private companies to refuel buses and other fleet vehicles. California-based
-- Few choices. There is only one factory-built, natural-gas car sold in the U.S. It's the natural-gas version of the
-- Cost. Additional fuel tanks and parts, and small-scale production make natural gas vehicles more expensive. The CNG Ram, for example, starts at $47,500, almost $20,000 more than a base Ram 2500. The natural-gas Civic starts at $26,155, or $10,000 more than a base four-door Civic. GM won't announce the price of its natural-gas trucks until next month, but expect a premium.
It can also cost up to $18,000 to convert a gasoline vehicle to a natural gas one, according to Natural Gas Vehicles for America, a lobbying group.
Mary Barcella, director of
It's the same story with hybrid cars, which have been on the market for more than a decade but have a price premium that is difficult to recoup, especially if gas prices are low. Hybrids only make up around 3 percent of the U.S. market.
The price for a natural gas vehicle could go down significantly if Congress approves a tax credit proposed in the Obama administration's 2013 budget. The administration has proposed replacing the current $7,500 electric vehicle tax credit with an advanced technology vehicle credit of up to $10,000. The credits would go to manufacturers in an effort to encourage lower prices and spur demand.
AP Energy Writers Jonathan Fahey in Houston and Chris Kahn in New York contributed to this report.