One of the key risk factor for CGD companies is EV adoption which is increasing every year.This can have significant impact as the majority of revenue for CGD companies comes from CNG vehicles.
In the past the majority of conversion to CNG use to happen by retrofitting CNG kits to vehicles. Now the majority of OEMs come with factory fitted CNG variants.( we can see this when we go to Maruthi/Toyota showrooms where there will be hoarding mentioning availability of factory fitted CNG cars). As the CNG ecosystem is developing across the country with Govt focus on gas based economy by allocating geographical areas and new CNG stations it’s probable that both CNG and EV vehicles may coexist in future.
Below is the data from https://vahan.parivahan.gov.in/vahan4dashboard/ which shows the no of CNG and CNG/Petrol vehicles sold across the country by OEMs. Overall sales seems to be uptrending particularly for the CNG only variants( 2020 and 2021 covid affected yrs)
( I am not sure why no for the year 2019 is low. May be some data issue or automobile sales were low due to economic slowdown and NBFC/ILFC crisis)
| ALL India | 2019 | 2020 | 2021 | 2022 | YTD2023 |
|---|---|---|---|---|---|
| CNG only | 33,337 | 43,192 | 1,66,253 | 2,96,795 | 1,37,764 |
| Petrol/CNG | 4,04,900 | 2,16,899 | 2,49,739 | 4,05,604 | 1,50,270 |
We can track data using state wise and RTO wise. Below is the data for the state of Maharashtra which is relevant for MGL.
| Maharastra | 2019 | 2020 | 2021 | 2022 | YTD2023 |
|---|---|---|---|---|---|
| CNG only | 575 | 8,128 | 31,587 | 48,888 | 20,741 |
| Petrol/CNG | 1,06,098 | 63,981 | 71,640 | 1,09,422 | 37,585 |
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