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The Global Hybrid Electric Vehicle Market Size is estimated to grow by 17,098.51 units between 2022 and 2027, accelerating at a CAGR of 30.88%. To combat air pollution caused by high CO2 emissions from on-road vehicles, reducing fuel consumption is a priority. This will help to reduce GHG emissions, which contribute to global warming and climate change. Green vehicles, which run on electricity, hybrid energy, or alternative sources such as solar or wind energy, are seen as a solution. The demand for these vehicles is driving growth in the market. Government incentives and tax credits have attracted both manufacturers and consumers, with many automakers showcasing fuel-efficient hybrid cars at global auto shows. This push towards green vehicles is expected to drive significant growth in the HEV market and increase its share of the global vehicle market in the near future.
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This market research report extensively covers market segmentation by propulsion (full HEVs, mild HEVs, and PHEVs), vehicle type (passenger cars and commercial vehicles), and geography (APAC, Europe, North America, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges.
Full HEV is a leading segment in the hybrid vehicle industry, particularly in Japan, preferred by many new car buyers. With a wide range of models, manufacturers have promoted this segment aggressively, leading to its popularity.
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The APAC region shows a gradual increase in the market share of 322.13 thousand units in 2017 and continued to grow by 2021. Compared to PHEVs, full HEVs have more fiscal incentives and require no charging infrastructure, making them a preferred choice for buyers. However, with the availability of more cost-effective vehicles such as all-electric and plug-in hybrids, the growth rate is expected to decline. Nonetheless, Technavio predicts that the growth rate of full HEVs will increase during the forecast period due to the declining cost of Li-ion batteries and the introduction of new models.
Commercial vehicles are those with a gross weight of over 8,500 lbs, including heavy trucks, pickup trucks, and vans used for transportation of cargo and passengers over long distances. Traditionally, commercial vehicles use ICE technology, but manufacturers are now exploring hybrid engines due to increasing emphasis on the environment and fuel efficiency. However, hybrid commercial vehicles are still in their nascent stage with limited sales due to high initial investment, limited range models, and competition from substitutes such as flex-fuel and CNG vehicles. North America, Japan, and Europe are key markets, with emerging markets in India, China, and Brazil. Government support in incentives and growing environmental concerns encourage the use of hybrid commercial vehicles globally.
APAC is estimated to contribute 46% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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APAC is one of the fastest-growing markets for HEVs. However, the sales of PHEV and mild HEV will be sluggish in Japan as these models will follow the Fuel cell HEV trend. In addition, HEV sales in APAC will be the most in China, which is expected to lead the global HEV market during the forecast period.
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The Market is witnessing exponential growth, driven by a global shift towards greener transportation solutions amid growing concerns over climate change and air pollution. HEVs combine internal combustion engines with electric propulsion systems, offering improved fuel efficiency and reduced emissions compared to traditional gasoline or diesel vehicles. Advanced features like regenerative braking harness kinetic energy to recharge batteries, enhancing energy efficiency. Government incentives and emission regulations are encouraging OEMs to invest in green technologies, driving innovation in battery technology, particularly lithium-ion batteries. Assembling units are scaling up production to meet the rising demand for HEVs, especially in urban areas where regulatory agencies are enforcing stricter emission standards. With continuous technology advancements, including high-voltage hybrid vehicles and Vehicle-to-Grid (V2G) integration, the HEV market is poised for sustained growth in the automotive sector. Our researchers analyzed the data with 2022 as the base year and the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The Market is witnessing significant growth driven by stringent emission norms imposed by governments globally to mitigate climate change and reduce greenhouse gas (GHG) emissions. Governments, including the EU, Japan, India, and the US, have introduced emission standards targeting reductions in carbon dioxide (CO2), nitrogen oxides (NOx), and particulate matter emissions from vehicles. For instance, the EU has set CO2 emission targets for new passenger cars and light commercial vehicles (LCVs), with penalties for non-compliance. Similarly, Japan and India have implemented norms like Euro VI and BS-6, respectively, to curb emissions. As more countries adopt such regulations, the demand for HEVs, equipped with electric propulsion systems and regenerative braking, is expected to rise, driving technological advancements and investment in charging infrastructure and battery technology.
HEV cost is dominated by battery cost, which accounted for almost 70% of the cost in 2012, with a 1 kWh Li-ion battery pack costing an average of USD 1,375. To make HEV models cost-effective, a significant reduction in battery cost is necessary, which can be achieved by using Li-ion battery designs with high power density.
The current hybrid system uses a heavy battery pack to enable electric drive with the engine off. This feature is only required during starting and sudden acceleration, which occurs for a small portion of the time when the engine is operating inefficiently. Thus, the heavy battery pack does not provide any additional benefits, and it increases recharging time. Unlike PHEVs, HEVs must be recharged through the engine and regenerative braking, so the efficiency of an HEV depends on the rate at which energy can be taken out or pushed back into the battery pack, not on the electric drive mode. This can be achieved by using small and high-density battery packs.
In conclusion, the future trend will be toward battery packs with optimized cell chemistries that have high power and density. Higher power density will enable smaller hybrid batteries, leading to cheaper HEVs in the future.
HEVs are more expensive to own than ICE vehicles due to the high-cost batteries, advanced electronics, and design considerations. The Nissan Leaf's 24 kWh battery costs USD 12,000, which is equivalent to a luxury ICE sedan's price. The Chevrolet Volt's 6 kWh battery pack costs an extra USD 5,000 compared to ICE vehicles, with fewer hours of operation and range.
HEV servicing costs are high because of the immature local market and the lack of availability of hybrid vehicle service parts. Malfunctioning components in the vehicle lifecycle can be costly, and replacements may depend on the availability of parts, slowing down service activity. Low-cost local parts and mechanics with HEV expertise are difficult to find, compelling owners to seek out company service stations that are limited in number or outside city limits.
HEV components wear out faster, increasing the frequency of replacing tires and brakes due to their heavy weight, negatively impacting their adoption and market growth.
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Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the Hybrid Electric Vehicle Market. One of the major player in the market include:
Globalchangan - The company offers hybrid electric vehicles such as Changan UNI K iDD. Also, the company is engaged in the production of passenger cars, microvans, commercial vans, and light trucks.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market players, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified. Furthermore, it is also quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market research report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
The Market is experiencing significant growth fueled by advancements in technology and increasing concerns over greenhouse gas emissions. With a shift towards electric propulsion systems and the development of advanced battery technology such as lithium-ion batteries, HEVs offer a sustainable solution to reduce carbon dioxide (CO2), nitrogen oxides (NOx), and particulate matter emissions. HEVs come in various forms, including full hybrids, mild hybrids, plug-in hybrid electric vehicles (PHEVs), and series, parallel, or combination configurations. These vehicles leverage stored electricity and regenerative braking systems to enhance fuel efficiency and reduce wasted energy. As urbanization drives the demand for environmentally friendly transportation, HEVs stand as a viable option, offering reduced fuel costs, lower emissions, and advanced driver-assistance systems (ADAS) for enhanced safety and efficiency.
Moreover, the market is witnessing significant growth driven by advancements in technology and increasing regulatory pressure to reduce emissions. HEVs combine internal combustion engines (ICE) with electric motors, offering improved fuel efficiency and reduced emissions compared to traditional gasoline or diesel vehicles. With the rise of vehicle-to-grid (V2G) technology and plug-in hybrid electric vehicles (PHEVs), consumers have more options for environmentally friendly transportation. OEMs are investing heavily in green technologies and high-voltage hybrid vehicles to meet stringent emission regulations imposed by regulatory agencies. Assembling units for HEVs are expanding, catering to the growing demand for hybrid engine vehicles in both two-wheelers and electric buses sectors. With regenerative braking systems harnessing kinetic energy, HEVs offer economically friendly alternatives to fossil fuel vehicles while maintaining resale value and reducing fuel consumption.
Hybrid Electric Vehicle Market Scope |
|
Report Coverage |
Details |
Page number |
172 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 30.88% |
Market growth 2023-2027 |
17098.51 th units |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
29.21 |
Regional analysis |
APAC, Europe, North America, South America, and Middle East and Africa |
Performing market contribution |
APAC at 46% |
Key countries |
US, China, Germany, France, and UK |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
AB Volvo, Bayerische Motoren Werke AG, BYD Co. Ltd., Chongqing Changan Automobile Co. Ltd., Ford Motor Co., General Motors Co, Honda Motor Co. Ltd, Hyundai Motor Co, Li Auto Inc., Mercedes Benz Group AG, Mitsubishi Motors Corp., Nissan Motor Co. Ltd., Renault SAS, SAIC Motor Corp. Ltd., Stellantis NV, Suzuki Motor Corp., Tata Sons Pvt. Ltd., Toyota Motor Corp., Volkswagen AG, and Zhejiang Geely Holding Group |
Market dynamics |
Parent market analysis, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
Customization purview |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Propulsion
7 Market Segmentation by Vehicle Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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