Hybrid Vehicle Market Analysis by Hybrid Type (Micro-Hybrid, Mild-Hybrid, Full-Hybrid, and Plug-In Hybrid); by Drivetrain (Parallel Drivetrain, and Series Drivetrain); by Component Type (Battery, Electric Motor, and Transmission); and by Vehicle Type (Passenger Cars, and Commercial Vehicles) – Global Supply & Demand Analysis & Opportunity Outlook 2023-2035
Buy Now Report ID: 4772 | Published Date: Mar 30, 2023
The global hybrid vehicle market size is estimated to reach ~USD 1.43 Billion by the end of 2035 by growing at a CAGR of ~3 % over the forecast period, i.e., 2023 – 2035. In addition to this, in the year 2022, the market size of hybrid vehicle was ~USD 1 Billion. The growth of the market can be attributed to growing pollution owing to the emission of carbon from vehicles. The annual carbon dioxide emissions from a typical passenger car are around 4.6 metric tonnes in United States. This assumes that the typical petrol car on the road gets about 22.0 miles per gallon of fuel and travels roughly 11,500 miles annually. 8,887 grammes of carbon dioxide are produced for every gallon of fuel used in this region. Hence the demand for hybrid vehicle is estimated to increase, as a result of the fact that hybrid vehicles have two engines, less fuel is used, which reduces CO2 emissions from the tailpipe, improving air quality and lowering carbon footprint.
Moreover, petrol vehicles are not only responsible for carbon emission but it also leads to emission of various other greenhouse gases. Methane (CH4), nitrous oxide (N2O), and hydrofluorocarbon emissions are all produced by automobiles through their tailpipes and leaking air conditioners, respectively. These gases emit fewer emissions than CO2, however since they have a larger global warming potential (GWP) than CO2, they could still have a significant impact. Hence, government of different countries are setting certain standard for the emission which is estimated to boost the market growth. In China, a limit for tailpipe N2O emission between 20 and 30 mg/km was established under the country's stage 6 emission standard which was estimated to be applied from July 2020.
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Base Year |
2022 |
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Forecast Year |
2023-2035 |
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CAGR |
~3% |
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Base Year Market Size (2022) |
~ USD 1 Billion |
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Forecast Year Market Size (2035) |
~ USD 1.43 Billion |
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Regional Scope |
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Growth Drivers
From a recent low of about USD 80 per barrel in September 2021 to over USD 90 in October 2021, Brent oil prices increased by about 11%. People are considering environmentally friendly options that allow them to save money on fuel and lower carbon emissions when driving as a result of rising prices for gasoline, diesel, and compressed natural gas (CNG) as well as high pollution levels. Hence demand for hybrid vehicle is estimated to increase.
The Ministry of Heavy Industries created the Faster Adoption and Manufacture of Hybrid and Electric Vehicles in India (FAME INDIA) programme in 2015 in India to encourage the use of electric and hybrid cars (xEVs) throughout the nation. With effect from April 1, 2019, Phase 2 of the FAME India Plan was put into place for a duration of 5 years with budgetary support of USD 1.34 billion. This phase seeks to give support through subsidies, 7090 e-Buses, 5,00,000 e-4 Wheeler Passenger cars, and 10,00,000 e-2 Wheelers for the electrification of public and shared transportation.
In America, it was predicted that about 55% of car owners would purchase an electric or hybrid vehicle in 2021.
Between October 2021 and January 2022, 678 public EV charging stations—roughly 2.5 times the previous totals—were installed in these 9 cities of India.
World biofuel production expanded gradually, rising from about 186 000 barrels of oil equivalent per day in 2000 to approximately 2 million barrels of oil equivalent per day in 2021.
Challenges
The global hybrid vehicle market is segmented and analyzed for demand and supply by vehicle type into passenger cars, and commercial vehicles. Out of which, the commercial vehicles segment is anticipated to garner the highest revenue by the end of 2035. The growth of the segment can be attributed to growing electrification of commercial vehicles. Moreover, large number of people prefer travelling from commercial vehicles since they are more convenient than private vehicles. However, commercial buses and trucks are known for causing most of the automobile pollution. The most polluting types of vehicles are freight vehicles. In the winter, vehicles make about 24% of the PM2.5 pollutions, while cargo trucks are responsible for approximately 48% of the total. Hence the demand for hybrid commercial vehicles is estimated to increase. Global automakers are making every effort to lower carbon emissions, leading to the daily development of more environmentally friendly vehicles. To the commercial vehicle industry, this tendency is quickly spreading. This is owing to the fact that they always drive further than personal vehicles and that they follow predetermined routes, which created a need for hydrogen trucks and buses. Commercial vehicles would therefore probably change in the near future and switch to eco-friendly power sources.
The global hybrid vehicle market is also segmented and analyzed for demand and supply by hybrid type into micro-hybrid, mild-hybrid, full-hybrid, and plug-in hybrid. Amongst which, the full-hybrid segment is expected to have the significant growth over the forecast period. Full hybrids are hybrid electric vehicles with more powerful electric motors and larger batteries. They could therefore operate only with an electric motor for a limited range of speeds. Although they often cost more than mild hybrids, they have additional features and significantly better fuel efficiency advantages. An FHEV's ability to convert to its internal combustion engine if users need to go farther or quicker is one of its main advantages. An FHEV could be the best option if users require longer range than a standard entry-level BEV could provide. One could keep using the electric engine to save money, but if users need to go farther, they could also switch to the gasoline mode. Hence this is estimated to boost the demand for full hybrid vehicles further boosting the market growth.
Our in-depth analysis of the global hybrid vehicle market includes the following segments:
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By Hybrid Type |
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By Drivetrain |
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By Component Type |
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By Vehicle Type |
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The market share of hybrid vehicle in Asia Pacific, amongst the market in all the other regions, is projected to have the highest growth, backed by growing pollution in this region along with surge in initiatives by government in order to encourage adoption of eco-friendly vehicles. In China, motorized vehicle emissions in 2021 were about 6 million tonnes of carbon monoxide. One of China's primary sources of air pollution was motorized transportation. Hence, With more than 500,000 electric buses already in service, China is putting a plan into action to encourage electric mobility. Guangzhou, Shenzhen, and Xi'an are the three Chinese cities with 100% electric public transportation networks in 2023. Hence owing to the rising the pollution caused by vehicles and government initiatives the preference for hybrid vehicle is growing. For instance, more than half of consumers, up to 52% globally and approximately 59% in APAC, including India, indicate choosing a hybrid electric car, signalling a change in preference (HEV). Also, during the forecast period, the market for hybrid vehicles is anticipated to have considerable demand growth as a result of high-performance lithium-ion batteries in this region.
The North America hybrid vehicle market is estimated to be the second largest, to grow at the highest share over the forecast period. The growth of the market in this region can be attributed to growing transportation. North America has more registered cars and more roads per capita than Western Europe. Road transportation is more economical than train travel over short distances. Road freight transit is becoming more and more well-liked since it offers door-to-door service. However, this also boosted pollution in this region. Hence the demand for hybrid vehicle is estimated to grow. Also, various key manufacturer of automobiles is coming up with various technology advancement in hybrid vehicles which is also estimated to increase preference for hybrid vehicles in this region.
Additionally, the market in Europe region is also estimated to have a significant growth over the forecast period, backed by growing awareness regarding environment among people. Also, government in this region are launching various subsidies and has banned polluting vehicles in most part. Also, businesses are working to create low-carbon options for LNG and offshore facilities in order to quicken the energy transition. During the assessment period, all of these reasons are projected to fuel the market for hybrid electric vehicles in Europe. Moreover, market participants are introducing a variety of fluids that are expressly made for hybrid and electric vehicles that could satisfy the cooling and lubrication requirements of contemporary and adaptive engines. Hence, this factor is also estimated to boost the market growth in this region.
Ford Motor Company is ramping up production at North American plants to meet strong customer demand for vehicles including the Mustang Mach-E, F-150 Lightning, Bronco Sport and Maverick. The company is also preparing to launch all-new versions of four flagship vehicles in 2023: the Super Duty, Ranger, Mustang and Escape.
For years, the technology company Continental AG has been supporting an ecological and cost-effective electrification of 48 volts, which could be used in both gasoline and diesel engines. Before IAA 2019, Powertrain presented the latest innovation in its 48-volt drive solution: a 48-volt high-power drive system with a power output of 30 kW. A full hybrid car with 48-volt technology - this was previously considered impossible. In order for a hybrid vehicle to run on electricity only, the electrical part of the power train would typically use high voltage technology - high voltages of 800 volts. However, Continental engineers managed to develop a 48-volt hybrid system with similar characteristics to high-voltage electric drive, namely 48-volt high-power technology.
In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.
Author Credits: Harshita Srivastava, Saima Khursheed
Ans: The major factors driving the growth of the market are rise in petrol prices, growing government initiatives for the adoption of hybrid vehicles, surge in adoption of hybrid vehicles, and others.
Ans: The market size of hybrid vehicle is anticipated to attain a CAGR of ~3% over the forecast period, i.e., 2023 – 2035.
Ans: High initial price, high maintenance and repair, and surge in adoption of FCEV & BEV are estimated to be the growth hindering factors for the market expansion.
Ans: The market in the Asia Pacific region is projected to hold the largest market share by the end of 2035 and provide more business opportunities in the future.
Ans: The major players in the market are Nissan Motor Co. Ltd., Toyota Motor Corporation, Hyundai Motor Company, Kia India Pvt. Limited, and more.
Ans: The company profiles are selected based on the revenues generated from the product segment, the geographical presence of the company which determines the revenue generating capacity as well as the new products being launched into the market by the company.
Ans: The market is segmented by hybrid type, drivetrain, component type, vehicle type and by region.
Ans: The commercial vehicles segment is anticipated to garner the largest market size by the end of 2035 and display significant growth opportunities.
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