The real numbers
The fact that Mexico surpassed 9,200 new natural gas vehicles during 2020 seems to have gone unnoticed. Therefore, it is important to make a correct reading of what happened last year. And it is that prior to the pandemic, the projection of the first 2 months indicated a potential to reach more than 13,000 new units circulating with CNG.
The reality is that in the Aztec giant we have more conversion centers than service stations that offer natural gas. There are 91 conversion centers and only 57 CNG stations; a strong indicator that highlights the severe difficulty we face in commissioning new dispensers, but on the other hand perfectly exemplifies the behavior of the market: MANY MORE VEHICLES NEED NATURAL GAS.
The growth pattern so far
And yet, there are still large cities in Mexico that do not have refueling stations. And on the other hand, other largely populated cities that have received their first stations have been an example of the speed at which the vehicle fleet can be converted. Over the last 3 years, cities such as Querétaro, Aguascalientes, León, and San Luis Potosí have been an example of how from one moment to another they become places where conversions are rapidly massing.
Some cities require more time than others, eventually, some markets may take longer than others but the reality of the numbers speaks of a very promising year of development in 2021 when new stations get fully operational in the states of Baja California, Tabasco, Sonora, Quintana Roo and Tamaulipas.
A brief reality check
The recent cold front in Texas and its impact on Mexico was a serious reality check for the taxi sector, the platform taxi sector (Uber, Cabify), and minivans that run on compressed natural gas after being affected by the required cuts by CENAGAS in the country.
«I continued to operate my gasoline taxi, but those days I only worked to pay for the gasoline»
said one driver as he recalled the three days of suffering due to the cut. What could have been remembered as an event that generated severe distrust in vehicular gas, became a «negative reinforcement» that allowed the users to appreciate the impact when they had to pay almost double for each kilometer traveled when using gasoline.
What to expect in the future
The expected growth for the next few years is definitely massive, and also uncomfortably inevitable. The market is crying out for it, and month after month when federal entities approve each new service station, vehicle growth can be predicted almost directly. The sector is artificially stagnated. On a regular basis, several workshops are established in the vicinity of the stations and a market begins to grow that in a short time fills these stations. On the one hand, the number of around 10,000 additional natural gas vehicles in a year is an all-time high, and an enviable growth under Mexico’s difficult regulatory conditions; but on the other hand, there are «only» 57 stations, and there are «only» 52,000 CNG vehicles circulating nationwide. Nevertheless, we are talking about an industry that in recent years has not received any federal support at the regulatory level, that is never promoted, and where there is no marked intention of an exponential shift in the short term.
In 2021, NGV in Mexico will definitely have another intense year, another difficult year but we will undoubtedly observe another proportional jump – not exponential – as the growth of the stations allows it.
Looking ahead, we lose sight of what’s in store for the sector, what is achievable when at the federal level we receive those little signals of promotion in the use of vehicular gas that we so desperately need. Interestingly, it is not necessary to allocate large resources for building new CNG stations, or to define bonus or subsidy schemes, nor is there a need for fiscal stimuli for the sector to reach levels of development like in other parts of the world. The interesting thing is that with a minimum regulatory effort a giant market is unlocked that allows opening the door to the cleanest and cheapest fossil fuel.
RC