Hybrid vehicles are automobiles powered by an internal combustion engine as well as an electric motor. They aim to reduce emissions and fuel costs by capturing kinetic energy through regenerative braking systems to charge the vehicle’s batteries. These vehicles predominantly operate in electric mode during city driving and switch to engine mode on the highways. Hybrids are versatile and can be passenger cars, commercial vehicles, buses, trucks and more. Rising environmental concerns about greenhouse gas emissions and depleting fossil fuel reserves globally have prompted many countries and automakers to push for more adoption of hybrid and electric vehicles. Hybrid vehicles have emerged as an effective solution to curb emissions in the transit sector.
The global hybrid vehicles market is estimated to be valued at US$ 465.39 Bn in 2023 and is expected to exhibit a CAGR of 5.4% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
Rising environmental concerns across the world have led to stringent emission norms for vehicles. Many countries have announced plans to phase out conventional gasoline vehicles in the coming decade to reduce air pollution. For instance, the EU has set a target for hybrids and electric vehicles to make up 50-70% of total new car sales by 2030. This is expected to drive significant demand for hybrids in the region. Additionally, fuel efficiency advantages of hybrid powertrains are an added value proposition for commercial vehicle buyers seeking reduced operational costs. Hybrid technology enables drastic improvements in fuel economy of up to 50% compared to conventional vehicles. Many fleet operators are proactively adopting hybrid buses and trucks to comply with emission norms as well as save costs in the long run. Growing focus on the importance of sustainable transportation is a major driver facilitating the growth opportunities for hybrid vehicles market players globally.
Segment Analysis
The global hybrid vehicles market is dominated by the passenger cars segment which holds around 90% share. Within the passenger cars segment, the hybrid electric vehicles sub-segment dominates with a share of over 70% mainly because hybrid electric vehicles offer significantly higher fuel efficiency compared to conventional gasoline vehicles without requiring drivers to plug them in. The commercial vehicles segment is expected to witness higher growth during the forecast period owing to rising adoption of hybrid electric buses and trucks by various cities and logistics companies focused on reducing their carbon footprint.
PEST Analysis
Political: Many countries and regions like the European Union and China have implemented stricter emission regulations which is encouraging automobile manufacturers to focus more on hybrid and electric vehicles. Some nations also provide purchase incentives for eco-friendly vehicles.
Economic: Fluctuating fuel prices and rising costs of gasoline powered cars are prompting more consumers to opt for more fuel efficient hybrid variants. However, higher costs of batteries remain a challenge for higher adoption.
Social: With growing environmental concerns, many customers are willing to pay more for greener vehicles. Additionally, lowering battery prices are improving the cost of ownership of hybrid vehicles.
Technological: Continuous improvements in battery technologies are improving the driving range and lifespan of hybrid vehicles. Technologies like regenerative braking are also enhancing their fuel efficiency.
Key Takeaways
The Global Hybrid Vehicles Market Size is expected to witness high growth supported by stricter emission regulations and increasing consumer demand for greener vehicles.
Regionally, Asia Pacific currently dominates the market led by China and Japan, owing to large automobile manufacturing bases and strong government support through subsidies and incentives for electric vehicles.
Key manufacturers like Wings Corporation, Lion Corporation, and Procter & Gamble Co are focusing on new product launches and expanding capacities of their existing hybrid models to capitalize on the ongoing shift towards more sustainable mobility solutions. Key players operating in the hybrid vehicles market are Wings Corporation, Lion Corporation, and Procter & Gamble Co. However, higher battery costs remain a key challenge for mass adoption of hybrid vehicles, though continuous technological advancements are expected to make them more affordable in the coming years.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it