Hybrid Vehicle Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Hybrid Vehicle Market has been segmented by Hybrid Type (Micro-hybrid, Mild-hybrid, Full-hybrid, and Plug-in hybrid), Vehicle Type (Passenger Cars and Commercial Vehicles), and Geography (North America, Europe, Asia-Pacific, and Rest of the World). The Report offers Market Sizes and Forecasts for the Hybrid Vehicle Market in value (in USD billion) for all the above segments.

Market Snapshot

hybrid Vehicle_Overview
Study Period: 2018-2027
Base Year: 2021
Fastest Growing Market: Europe
Largest Market: Asia Pacific
CAGR: 29.13 %

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Market Overview

The Hybrid Vehicle Market was valued at USD 252.06 billion in 2020 and is expected to reach a value of USD 1166.65 billion by 2026, registering a CAGR of 29.13% during the forecast period.

The outbreak of COVID-19 has hindered the growth of the hybrid vehicle market with continuous lockdowns and the subsequent economic slowdown across the world. In addition, the cost of hybrid vehicles and lack of charging infrastructure may also hinder the market's growth rate in emerging economies, as cost-sensitive customers find conventional IC engine vehicles affordable.

However, the sales of hybrid electric vehicles improved post June 2020 as lockdown lifted in most countries and forecasted period is expected to be optimistic as manufacturers are planning to launch new models to attract customers. In 2020, Toyota sold 337,000 hybrid vehicles in the United States, accounting for 16% of united states sales, and it plans to launch new models of hybrid electric vehicles in 2022.

Major factors driving the growth of the market are growing environmental concerns, enactment of stringent emission and fuel economy norms, and increasing government initiatives (in terms of subsidies, tax rebates and benefits), increase in R&D efforts of major companies in Hybrid Electric Vehicles during the forecast period.

Across the regions in Asia Pacific,China holds significant share in market owing to highest vehicle sales. Investments of foreign companies in developing nations and increasing awareness about benefits of hybrid vehicles is likely to have a positive impact on this regional market. Currently, vehicle manufacturers such as Toyota and Honda have been dominating the hybrid vehicle segment in China, with their models such as Toyota Corolla Hybrid and Honda Accord Hybrid. In the first three quarters of 2019, Corolla Hybrid sold 38,540 units in China, which has accounted for nearly 20% increase of total hybrid deliveries during the period

Scope of the Report

Hybrid vehicles are powered by an internal combustion engine and an electric motor, it uses energy stored in batteries where the battery is charged through regenerative braking and by the internal combustion engine. The hybrid vehicle market report covers the latest trends, covid-19 impact followed by technological developments in the market. The scope of the report covers segmentation based on hybrid type, vehicle type, and geography. By hybrid type, the market is segmented into micro-hybrid, mild-hybrid, full-hybrid, and plug-in hybrid. By vehicle type, the market is segmented into Passenger cars and Commercial vehicles, by geography type the market is segmented into North America, Europe, Asia-Pacific, and the Rest of the World. For each segment, the market sizing and forecast have been done on basis of value (USD billion).

Hybrid Type
Micro hybrid
Mild Hybrid
Full Hybrid
Plug-in Hybrid
Passenger Cars
Commercial Vehicles
North America
United states
Rest of North america
United Kingdom
Rest of Europe
Asia Pacific
South Korea
Rest of Asia Pacific
Rest of the World
South America
Middle East&Africa

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Key Market Trends

Increasing Government Subsidies and Policies to Drive Market

Globally, governments are offering many subsidies (tax rebates and incentives) for customers purchasing electric and hybrid vehicles. The Chinese government recently introduced measures to support the new energy vehicle (NEV) industry i.e., electric vehicles, plug-in hybrid vehicles, and fuel cell vehicles – which was hit hard by the COVID-19 outbreak by extending tax exemptions and subsidies that were set to expire by 2020 and hinted at new investments that could further boost the country’s hybrid electric vehicle market in the long run.

The demand for hybrid vehicle market is rising in developing countries such as Mexico, India, Brazil due to stringent emission regulation standards and the growing demand for low or zero-emission vehicles. Recently government of India announced an outlay of 10,000 crore for Phase 2 of FAME 2 scheme, to promote setting up of charging stations infrastructure and e mobility in country. The Brazilian government is encouraging the purchase of hybrid vehicles such as plug-in hybrid, hybrid electric, and CNG hybrid by reducing the tax rate.

As Climate change rose to the top of many European governments’ agendas. The United Kingdom committed to a target of net zero emissions by 2050 and proposed a ban on the sale of all polluting vehicles by2035.Germany plans to cut greenhouse gas emissions by 40 per cent by the end of 2020, by 55 per cent by the end of 2030 and up to 95 per cent by the end of 2050, compared to 1990 levels supporting market growth.

The governments in the US and Europe are concentrating on lowering emission limits to decrease the greenhouse gas effect and are also focusing on improving the fuel economy of vehicles. For instance, the US Department of Transportation has set the Corporate Average Fuel Economy (CAFE) standards for vehicles. Electric and hybrid modes of transport are gaining momentum in the Gulf region and particularly in Israel, Jordan, Oman, Saudi Arabia, and UAE. For instance, Dubai’s Roads and Transport Authority announced its ambitious plans for converting half of the emirate’s cabs to hybrid vehicles by 2021.

Hybrid vehicle market_trend 1

China to Lead Hybrid Vehicle Market

China registered the highest growth rate in the market for hybrid and electric vehicles. During the forecast period, the country may also witness growth in the adoption of hybrid electric buses, as more than 30 Chinese cities have made plans to achieve 100% electrified public transit by 2020, including Guangzhou, Zhuhai, Dongguan, Foshan, and Zhongshan in the Pearl River Delta, along with Nanjing, Hangzhou, Shaanxi, and Shandong.

In February 2020, Honda Motor Company, Ltd. has announced to begin its sales of all-new Honda Fit Hybrid vehicles. It is equipped with Honda’s 2-motor hybrid system which drives the vehicle with an electric motor, which results a better fuel efficiency and smooth drive. For instance, The Chinese government is implementing China 6 norms for pollution control in the region which are stricter than previous China 5 norms and are based on EURO 6 norms, form July 2020, which results in supporting the demand of micro hybrid vehicles in this region.

Owing to the above trends, major automotive companies are planning to invest in the Chinese market, in order to take advantage of the strong demand for hybrid and electric vehicles in the country. Nissan, BYD, Honda, Dongfeng, and Toyota motor have all announced to continue their investment plans in the Chinese market during the forecast period.

hybrid vehicle market_geography

Competitive Landscape

The hybrid vehicle market is mainly dominated by some of the major automotive players, such as Toyota, Nissan, Honda, BYD, Mitsubishi, BMW, Ford, etc., of which, Toyota, Nissan, and Honda, holding a significant market share of the hybrid vehicle market, globally.

The companies are making new strategic partnerships, investing majorly in R&D projects, and launching new products in the market for being ahead of their rivalries. For instance, 

  • Ford is investing USD 11 billion in electrification, with plans to add 40 hybrid and fully electric vehicles to its lineup by 2022.
  • Toyota Prius was the world's first mass-produced hybrid car, and the firm has sold 13 million hybrid cars since its introduction. The company has taken strategic step to promote hybrid cars as a bridge to fully electric vehicles.

Recent Developments

In October 2020, BMW AG announced it will be launching 25 hybrid electric vehicle models across the world by 2023.

In August 2020, Paice a hybrid vehicle technology provider announced it has signed an agreement to license its patented hybrid technology to Mitsubishi Motors.

In January 2020, Hyundai Motor Group has announced that it would invest USD 87billion over the next five years to enhance its leadership in vehicle electrification by expanding models in hybrid and battery electric vehicles.

Table of Contents


    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study




    1. 4.1 Market Drivers

    2. 4.2 Market Restraints

    3. 4.3 Industry Attractiveness-Porter's Five Force Analysis

      1. 4.3.1 Bargaining power of suppliers

      2. 4.3.2 Bargaining Power of Consumers

      3. 4.3.3 Threat of New Entrants

      4. 4.3.4 Threat of Substitute Products

      5. 4.3.5 Intensity of Competitive Rivalry


    1. 5.1 Hybrid Type

      1. 5.1.1 Micro hybrid

      2. 5.1.2 Mild Hybrid

      3. 5.1.3 Full Hybrid

      4. 5.1.4 Plug-in Hybrid

    2. 5.2 Vehicle

      1. 5.2.1 Passenger Cars

      2. 5.2.2 Commercial Vehicles

    3. 5.3 Geography

      1. 5.3.1 North America

        1. United states

        2. Canada

        3. Rest of North america

      2. 5.3.2 Europe

        1. Germany

        2. United Kingdom

        3. France

        4. Italy

        5. Norway

        6. Netherlands

        7. Rest of Europe

      3. 5.3.3 Asia Pacific

        1. China

        2. India

        3. Japan

        4. South Korea

        5. Rest of Asia Pacific

      4. 5.3.4 Rest of the World

        1. South America

        2. Middle East&Africa


    1. 6.1 Vendor Market Share

    2. 6.2 Company Profiles

      1. 6.2.1 Toyota Motor Corporation

      2. 6.2.2 Nissan Motor Co.Ltd

      3. 6.2.3 Honda Motor company Ltd

      4. 6.2.4 Hyundai Motor Company

      5. 6.2.5 Kia Motors Corporation

      6. 6.2.6 Diamler AG

      7. 6.2.7 Volvo Group

      8. 6.2.8 Volkswagen Group

      9. 6.2.9 BMW AG

      10. 6.2.10 Ford Motor Company

      11. 6.2.11 Mitsubishi Motors Corporation

      12. 6.2.12 BYD Co. Ltd



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Frequently Asked Questions

The Hybrid Vehicle Market market is studied from 2018 - 2026.

The Hybrid Vehicle Market is growing at a CAGR of 29.13% over the next 5 years.

The Hybrid Vehicle Market is valued at 189 Billion USD in 2018.

The Hybrid Vehicle Market is valued at 1166 Billion USD in 2026.

Europe is growing at the highest CAGR over 2021- 2026.

Asia Pacific holds highest share in 2020.

Toyota Motor Corporation, Nissan Motor Co. Ltd, Honda Motor Company Ltd, Kia Motors Corporation, BYD Co.Ltd are the major companies operating in Hybrid Vehicle Market.

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