The Lightning Gun fires, essentially, a basic laser rifle's laser. At the point of impact it generates a natural gas cloud. After a moment, a second laser flies in (horizontally, from a seemingly arbitrary location) towards the gas cloud to ignite it. The secondary laser might not be able to reach the gas cloud (blocked by terrain/objects) in which case the gas cloud can be ignited manually by firing another shot into it (with the Lightning Gun or any other weapon that can ignite natural gas). and is also unatainable within the game.
The projectile is bugged and sometimes continuously generates natural gas at the point of impact (which leads to a fiery explosion that goes on forever). Saving prior to each use of the Lightning Gun is advised as an infinite explosion can severely hamper game performance. This only happens when using the Lightning Gun on cars. It can also do this on Super Mutant Overlords.