HYBRID VEHICLES MARKET ANALYSIS

The global hybrid vehicles market size was valued at US$ 392.4 billion in 2022 and is anticipated to witness a compound annual growth rate (CAGR) of 18.6% from 2023 to 2030.  The hybrid vehicles market is expected to grow significantly in the upcoming decade, as the world increasingly recognizes the need for clean energy. Several governments are spending huge sums of money to develop infrastructure to support electric and hybrid vehicle production. This is creating new growth opportunities for key players in the hybrid vehicles industry.  

Global Hybrid Vehicles Market: Regional Insights

North America is anticipated to show significant growth in the global hybrid vehicles market over the forecast period. This can be due to rising sales of hybrid vehicles in the region. Moreover, growth of automotive industry in Canada and growing support from the government of the country for electric vehicles is also driving growth of the global hybrid vehicles in North America.

Furthermore, Europe is also anticipated to major growth in the global hybrid vehicles market over the forecast period. Market players in countries such as Germany and the U.K. are introducing strategies that match stringent standards regarding emissions. Moreover, there is a rise in investments and incentives such as ownership tax, purchase grant, and company car tax for promoting clean cars. Thus, the demand for hybrid vehicles is increasing in the region, which is expected to drive the market growth in the coming future. 

Figure 1: Global Hybrid Vehicles Market Share (%), By Region, 2022

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Global Hybrid Vehicles Market Drivers:

Government initiatives to boost the demand for hybrid vehicles

Growth of hybrid vehicles has tremendously increased globally, as these vehicles are appealable to larger audience than fully electric vehicles. Hybrid vehicles combine the long-range drivability, reliability, and instant refueling benefits of diesel and petrol vehicles. Government of countries around the world are focusing on various initiatives including offering subsidies to customers that purchase electric and hybrid vehicles. As a result, the demand for hybrid vehicles is increasing all over the world, which is likely to aid in growth of the global hybrid vehicles market over the forecast period.

Positive impact of hybrid vehicles on environment to support the market growth

Hybrid vehicles offer benefits of both gasoline engines and electric motors. These vehicles provide higher fuel and power efficiency as compared to traditional vehicles. For instance, use of hybrid system can reduce nearly 35% of fuel consumption. Most of the hybrid vehicles use advanced technologies such as automated start/stop, which reduces the idling of vehicles as it stops the engine automatically and offers immediate acceleration when it’s restarting.

Global Hybrid Vehicles Market Opportunities:

Growing initiatives toward reducing cost of electric motors is a major factor creating growth opportunities in the global hybrid vehicles market over the forecast period. Some of the state government associations are supporting various private associations that are focusing on achieving the ‘EV Everywhere Grand Challenge’ to drive the adoption of electric vehicles all over the world by 2025. For stance, the Vehicle Technologies Office (VTO) is actively supporting research and development activities for improving the electric motors used in hybrid and plug-in EVs. Such initiatives are likely to create growth opportunities in the market.

Growing market in developing countries is also expected to support growth of the global hybrid vehicles market over the forecast period. Hybrid vehicles are anticipated to offer substantial opportunities in developing countries due to support and initiatives by governments in these region. For instance, the government of India offers incentives of nearly US$ 446 on a purchase of electric and hybrid vehicles in the country. Thus, the market is growing emerging countries creating growth opportunities for the global market.

Global Hybrid Vehicles Market Trends:

Increasing popularity of plug-in hybrid vehicles is a recent trend

With rise in per capita income as well as disposable income all over the world, the demand for passenger and personal vehicles continues to increase day by day. The number of automotive vehicle fleet is increasing due to which the carbon emissions are also increasing worldwide. Along with this, rise in fuel prices and awareness about global warming is also increasing globally. As a result, the demand for substitute vehicles is increasing, in turn driving the popularity of plug-in hybrid vehicles. This trend is likely to support growth of the market in the coming future.

Demand for parallel hybrids is another trend in the market

Parallel hybrid powertrains provide more flexibility to switch from ICE to electric motor power. It also offers higher power efficiency in long-distance cruising and driving. Parallel hybrids require only one electric motor compared to series hybrids. Moreover, its strength can be adjusted while designing as per the combustion engines. Thus, the demand for parallel hybrids is increasing, which in turn is driving growth of the global hybrid vehicles market.

Global Hybrid Vehicles Market Restraints:

High cost of these vehicles to hinder the market pace

Hybrid and electric vehicles cost more than conventional vehicles that run on gasoline or diesel. This in turn impeded adoption of these vehicles mostly in developing regions. This factor is further expected to hamper growth of the global hybrid vehicles market over the forecast period. However, production of EVs is increasing by manufacturers through implementation of concept of economies of scale in order to reduce the cost of manufacturing. This factor is likely to support growth of the market.

Shortage of suitable EV infrastructure to impede the market growth

EV infrastructures such as charging stations are crucial for any type of EVs. Several regions have lack of such infrastructure which further affects adoption of these vehicles. The process of building charging stations is a complex process and can be of high cost. Thus, this factor acts as a major restraining factor for the global hybrid vehicles market, specifically in countries such as Brazil and India.                          

Figure 2: Global Hybrid Vehicles Market Share (%), By Hybrid Type, 2022

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Global Hybrid Vehicles Market Segmentation:

The global hybrid vehicles market report is segmented into Hybrid Type and Vehicle.

Based on Hybrid Type, the market is segmented into Micro-hybrid, Mild-hybrid, Full-hybrid, and Plug-in Hybrid. Out of which, Micro-Hybrid is expected to dominate the global market over the forecast period and this is attributed to the increasing production of micro-hybrid vehicles by most of the OEMs. For instance, in 2014, Mazda launched i-ELOOP based on micro-hybrid technology. Thus, the segment is likely to show strong growth in the coming years.

Mild-Hybrid segment is also expected to witness significant growth in the near future and this is owing to the rise in development in battery technology. This is further driving the production of mild-hybrid vehicles. However, these vehicles do not offer all the capabilities of full-hybrid systems. Nevertheless, the technology continues to gain momentum, which is further driving growth of this segment.

Based on Vehicle Type, the market is segmented into Passenger Cars, Commercial Vehicles. Out of which, Passenger Cars is expected to dominate the global market over the forecast period and this is attributed to the launch of more hybrid variants in passenger vehicles by key OEMs. Several companies such as Honda, Nissan, Toyota, and Kia among other are focused on launch of hybrid variants of passenger vehicles. As a result, the adoption of these vehicles is increasing all over the world, which is expected to support growth of this segment in the market.

Commercial Vehicles segment is also expected to witness significant growth in the near future and this is owing to the rise in demand for light commercial vehicles around the world leading to launch of various hybrid commercial vehicles. Major OME companies are likely to continue investing in production of more hybrid commercial vehicles. This in turn is expected to drive growth of the market in the coming future.

Global Hybrid Vehicles Market: Key Developments

In November 2022, Mitsubishi Motors Corporation announced availability of plug-in hybrid electric vehicle model of Outlander crossover SUV in the U.S. and Canada.

In October 2022, Korea Fuel-Tech Corporation announced the investment of US$10 billion in the construction of a novel plant for producing carbon canisters as well as hybrid vehicle fuel systems in Auburn, the. U.S.

In July 2021, XL Fleet and ARBOC of NFI entered into partnership for electrifying Freedom low floor buses from ARBOC with XL Hybrid electric propulsion system.

In July 2021, Mitsubishi announced plans to launch plug-in hybrid models of the Outlander having new-generation PHEV system. The vehicle will be launched in the U.S. in the second half of 2022.

Global Hybrid Vehicles Market: Key Companies Insights

The global hybrid vehicles market is highly competitive. This is attributed to continuous launch of new technologies due to ongoing R&D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on regional as well as global basis.

Some of the key players in the global hybrid vehicles market are Toyota Motor Corporation, Nissan Motor Co. Ltd., Honda Motor Company Ltd., Hyundai Motor Company, Kia Motors Corporation, Daimler AG, Volvo Group, Volkswagen Group, BMW AG, Ford Motor Company, Mitsubishi Motors Corporation, and BYD Co. Ltd.

*Definition: A hybrid is a car that uses both an internal combustion engine (ICE) and an electric motor to drive the wheels. The ICE and the electric motor work together to create the power necessary for the car to move, with each providing different advantages to the vehicle.