Market Trends of Europe Mild Hybrid Vehicles Industry
Passenger Car Segment is Anticipated to Dominate the Market
Passenger cars are the leading segment by vehicle type in the Europe mild hybrid vehicle market primarily driven by a shift in consumer preferences towards low-emission vehicles. The stringent emissions norms, raised fuel efficiency standards, and targets set by European countries to phase out internal combustion engine (ICE) mobility by 2030 are crucial factors fuelling the demand for mild hybrid passenger cars in the region.
The European Parliament's goal to reduce vehicle emissions by 40% between 2020 and 2025 further underscores the importance for cleaner transportation solutions, positioning mild hybrid vehicles as a vital step towards the electrification of the automotive sector.
Mild hybrid systems offer significant advantages, including smooth engine start-up, kinetic energy-based battery charging, and the ability to cover short distances on electric power, all contributing to reduced overall fuel consumption. This has strong appeal especially among consumers seeking low-emission passenger cars, aligning with the rising popularity of mild hybrid vehicles.
Additionally, the cost-effectiveness of mild hybrid vehicles, attributed to their less sophisticated design compared to full hybrid counterparts, makes them a financially viable option for consumers.
Further, major automakers operating in Europe, such as Volkswagen, Audi, Renault, Nissan, and Toyota, are making substantial investments in the production of mild hybrid cars in Europe. These vehicles are designed to cater to the diverse needs and preferences of European consumers while addressing concerns about environmental impact. For instance,
- In November 2023, Jeep expanded its Avenger SUV lineup with the introduction of the mild-hybrid powertrain based Avenger e-Hybrid. The Avenger e-Hybrid is a 48V mild-hybrid system featuring a 21 kW electric motor integrated into the SUV's gearbox offering for low-speed EV-only driving for up to 1 km.
However, while the rising sales of all-electric vehicle models in countries like the United Kingdom, Germany, and France pose a potential challenge for the passenger car segment of the mild hybrid market, mild hybrid cars will continue their steady growth driven by their cost and fuel efficiency.
Spain is Expected to Showcase Fastest Growth among other European Countries
Spain is anticipated to be the fastest-growing market, followed by Italy, France, and Germany in the European region. The sales of mild hybrid vehicles in Spain are expected to showcase major growth, owing to the lower price of mild hybrid vehicles compared to battery-electric vehicles (BEVs) or plug-in hybrid electric vehicles (PHEVs). Additionally, the majority of EV buyers in Spain need financial aid to afford strong hybrids and battery electric vehicles. Therefore, mild hybrid vehicles are the most preferred choice of vehicle in Spain.
Further, to curb carbon emissions in the economy, the government of Spain identified various sectors having major contribution in carbon emissions, automotive industry being one of them. The government of Spain imposes stricter regulations to combat the sale of ICE vehicles to curb carbon emissions, there is expected to be a greater demand for low-emission vehicles such as mild hybrid vehicles in the market.
For instance, Spain produced nearly 261 million metric tons of carbon dioxide (MtCO) emissions in 2022, marking a 7% increase compared to 2021. It would help the country in limiting carbon emissions by shifting to an electrified ecosystem, which is expected to assist the growth of mild hybrid vehicles in the country.
Additionally, the market is witnessing the launch of various advanced mild hybrid vehicle models with improvements in battery technology as players operating in the market try to gain a competitive edge with the diversification of their product portfolio. For instance,
- In September 2022, Mitsubishi Motors Europe BV announced the production of the ASX mild hybrid SUV at Renault's plant in Valladolid, Spain.
Thus, with companies coming up with new launches and investments, the market for mild hybrid vehicles is expected to grow with a subtle rate over the forecast period in Spain.
