CNG has some real problems compared to gasoline in private vehicles, namely the fuel tank. I've been in a couple of these vehicles, and the main problem is that there's little or no storage space. Consumers aren't going to be too happy about that. In pickup trucks, the tank takes up about 1/3 of the cargo bed. So you can forget about carrying sheets of plywood and many other large objects. In small cars, the tank takes up the entire trunk, so you can forget about putting any luggage or groceries or anything else back there.
Basically, CNG has extremely poor energy density compared to gasoline, when you compare the size of a fuel tank versus the driving range that fuel tank gives you. The fuel is a compressed gas, which obviously isn't nearly as dense as a liquid, and because it's compressed it requires a tank with very thick, heavy-duty walls. So you end up with a giant tank consuming your whole trunk just so you can have a measly 100-mile range on CNG, when a simple 12-gallon gasoline tank gives you a 3-400 mile range. The only people here who have these vehicles are people who participated in Arizona's program back around 2000 where the state government gave them a giant discount on the cost of a car, plus a free conversion to CNG (dual-fuel; you can switch between the two). So people were buying these giant, expensive SUVs for 1/2 the normal cost, which had the spare tire replaced with a 5-gallon CNG (good for a 20-mile drive maybe) tank to qualify for this giant rebate. Other vehicles with more serious conversions of course were made too like the ones I mentioned above, but still the range wasn't that great and the tanks took up most of the useful cargo space in these vehicles.
The only way to make these vehicles practical would be to completely redesign the chasses for these giant tanks, but now you're talking about an enormous expense for the automakers, and a totally separate product line, for something that might do about as well as diesel cars have done in the USA (which is very, very bad for those who don't know). You just can't take a regular gas car and convert it to CNG with great results. At least with diesel, you can use the exact same chassis quite easily; you just need to drop in a different engine. Making CNG cars is going to be more like making electric cars (or also hybrid electric cars with very good all-electric range, a la Chevy Volt): for really good results, you'll have to make purpose-built vehicles, just like GM did with the Volt and Tesla did with their cars. Conversions using gasoline chasses just don't work out too well; you either end up with crap range because you're limited to how many batteries you can stuff into various voids in the chassis or engine compartment (which wasn't designed with these batteries in mind), or you end up with no cargo room because you've filled it with batteries (like the electric pickup trucks I've seen pictures of: they fill the cargo bed with batteries, which totally defeats the purpose of a pickup truck).
So if you're an automaker, and you'll have to spend a huge pile of cash to engineer an all-new chassis, would you rather spend that on a car that only runs on CNG (maybe with a tiny gas tank just in case the customer can't find a handy CNG station), or would you rather spend that on making a plug-in hybrid electric vehicle like the Volt that runs ~40 miles on electricity, enough for most commutes, and then has an efficient gas engine for driving cross-country, letting customers use the already-existing gasoline infrastructure?
This whole thing is just a bad idea. Electric is the way to go, hybrid at first, with some dedicated commuter cars like the Leaf, and full electric later when battery capacities are better and fast recharging options are better. The other thing our dumb government should be pushing for cities is a personal rapid transit system like SkyTran [skytran.net], which is all-electric, uses very little power, and would be perfect for shuttling commuters between suburbs and their workplaces. If they want to find something, they should be funding that instead.
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