Europe Mild Hybrid Vehicles Market Size

Europe Mild Hybrid Vehicles Market Analysis

The Europe Mild Hybrid Vehicles Market size is estimated at USD 16.42 billion in 2024, and is expected to reach USD 20.21 billion by 2029, growing at a CAGR of 4.25% during the forecast period (2024-2029).

The Europe mild hybrid vehicle market is growing steadily. Several factors contribute to the growth of the mild hybrids in Europe, such as the growing awareness of environmental concerns, and shifting consumer preference for more eco-friendly transportation options. 

Additionally, European governments are supporting the shift towards greener transportation. Incentives such as tax relaxation, and subsidies make mild hybrid vehicles more attractive choice to buyers. Further, the regulations aiming to reduce carbon emissions are also pushing both car manufacturers and consumers towards more sustainable options, creating a room for mild-hybrids to grow. For instance, 

• From 2025 onwards, Regulation (EU) 2019/631 sets stricter EU-wide CO2 fleet targets: a 15% reduction by 2025 for both cars and vans and, from 2030, a 50% reduction target for vans and a 55% reduction target for cars, all relative to a 2021 baseline. It also sets a zero-CO2 emission target for new cars and vans from 2035 onwards.

However, the dominance of strong hybrids and battery electric vehicles (BEVs) in European countries such as Germany, France, Sweden, Norway, and the Netherlands is likely to act as a major restraint for the growth of mild hybrid vehicles in the region. The penetration of all-electric vehicles in the European region showcased considerable growth in recent years, with sales of battery electric vehicles (BEVs) touching 54.7% in July 2023 compared to the same month in 2022. Therefore, the adoption of mild hybrid models, which integrate an internal combustion engine (ICE) in their powertrain, is likely to witness slower growth as compared to its counterparts.

Over the long term, new model launches by major industry players and a rise in sales of electric and hybrid vehicles, as well as the adoption of strict vehicle emission norms and fuel efficiency standards, are expected to create demand in the electric vehicles industry with a surge in sales of mild hybrid vehicles. Key players in the market are launching new models to cater to the increased demand for mild hybrid vehicles. For instance, 

• In September 2022, Mitsubishi Motors Europe B.V. launched the new generation ASX SUV in Europe with a mild hybrid system. The vehicle will be made at Renault's Valladolid plant in Spain. In September 2022, Nissan Europe launched the fourth generation X Trail SUV in Europe, including a mild hybrid version of the same vehicle.