Hybrid Vehicle Market - Growth, Trends, COVID-19 Impact, and Forecast (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 market
Study Period: 2018-2027
Base Year: 2021
Fastest Growing Market: Europe
Largest Market: Asia-Pacific
CAGR: 28.9 %
hybrid car manufacturers

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Market Overview

The hybrid vehicle market was valued at USD 324.92 billion in 2021, and it is expected to reach USD 1,490.1 billion by 2027, registering a CAGR of 28.90% during the forecast period (2022 – 2027).

The COVID-19 pandemic has hindered the growth of the hybrid vehicle market as continuous lockdowns and shutdowns of manufacturing units resulted in a decline in production levels of these vehicles. Moreover, supply chain complexities have contributed to the increased cost of hybrid vehicles.

However, the sales of hybrid electric vehicles improved post-June 2020 as the lockdown lifted in most countries. The forecast 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 US sales, and it plans to launch new models of hybrid electric vehicles in 2022.

Some of the major factors driving the growth of the market studied are the enactment of stringent emission and fuel economy norms and government incentives for promoting the purchase and adoption of hybrid vehicles. Additionally, with governments taking stringent actions, in the form of regulation and incentives, along with the increased initiatives for the provision of public charging stations for electric vehicles, the market studied is expected to grow at a high rate.

The Asia-Pacific hybrid vehicles market is expected to witness a high growth rate during the forecast period. The market growth in this region can be attributed to the increased sales of hybrid vehicles in Japan, China, and South Korea. As the Asia-Pacific region is home to major players in the hybrid vehicles market, such as Toyota, Honda, Nissan, Kia, BYD, and Hyundai, their active engagement in this segment creates a positive environment in the market.

Scope of the Report

Hybrid vehicles are powered by an internal combustion engine and an electric motor, which 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 the basis of value (in USD billion).

Hybrid Type
Micro-hybrid
Mild-hybrid
Full-hybrid
Plug-in Hybrid
Vehicle
Passenger Cars
Commercial Vehicles
Geography
North America
United states
Canada
Rest of North america
Europe
Germany
United Kingdom
France
Italy
Norway
Netherlands
Rest of Europe
Asia-Pacific
China
India
Japan
South Korea
Rest of Asia-Pacific
Rest of the World
South America
Middle East & Africa

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Key Market Trends

Rising Government Subsidies and Policies to Drive the 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 were 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 in the hybrid vehicle market is rising in developing countries such as Mexico, India, and Brazil due to stringent emission regulation standards and the growing demand for low or zero-emission vehicles. Recently, in 2021, the Government of India announced an extension of its prestigious scheme FAME II till 2024 to encourage electric mobility across the country. In similar terms, the Brazilian government is encouraging the purchase of hybrid vehicles such as plug-in hybrids, hybrid electric, and CNG hybrids by reducing the tax rate.

The governments in the United States and Europe are also 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 Corporate Average Fuel Economy (CAFE) standards for vehicles. The United Kingdom committed to a target of net-zero emissions by 2050 and proposed a ban on the sale of all polluting vehicles by 2035. Germany plans to cut greenhouse gas emissions by 40% by the end of 2020, by 55% by the end of 2030, and up to 95% by the end of 2050, compared to 1990 levels, supporting market growth.

Electric and hybrid modes of transport are gaining momentum in the Gulf region, particularly in Israel, Jordan, Oman, Saudi Arabia, and the United Arab Emirates. 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. All developments across government policies and regulations implemented to encourage hybrid electric vehicles consumption indicate an optimistic environment for hybrid vehicle demand over the forecast period.

hybrid cars on the market

China to Play a Key Role in the Development of the Hybrid Vehicle Market

China is one of the significant players in the hybrid electric vehicle market across the world as it accommodates notable production capabilities and consumer demand. China started gaining momentum post-pandemic, and the demand for these hybrid and plug-in hybrid electric vehicles started seeing positive trends. For instance, over 0.22 million new plug-in hybrid electric vehicles (PHEV) were sold in China in 2020. Such instances are expected to encourage players operating in the market.

In addition, government incentives and key players' presence further add to the development of demand in the market during the forecast period. For instance, the Chinese government started 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, from July 2020, which supported the demand for micro hybrid vehicles in this region. In February 2020, Honda Motor Company Ltd 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, resulting in better fuel efficiency and smooth drive.

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, including Guangzhou, Zhuhai, Dongguan, Foshan, and Zhongshan in the Pearl River Delta, along with Nanjing, Hangzhou, Shaanxi, and Shandong. All these aforementioned factors and developments are anticipated to help China stand as a unique destination for investments by manufacturers and are expected to play a prominent role in the growth of the overall hybrid vehicle market over the forecast period.

hybrid car market

Competitive Landscape

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

Some of the key players operating in the hybrid vehicles market are Ford Motor Company, General Motors Company, Honda Motor Co., Ltd., Daimler AG, and Volkswagen AG, which are also planning to provide enhanced product portfolios and technological breakthroughs in the hybrid vehicles market. For instance,

  • In 2021, Toyota announced an investment of around USD 6.2 billion for developing a hybrid vehicle technology. It also stated that the company was planning to invest USD 13.6 billion in batteries used for electric and hybrid vehicles by 2030.
  • In 2021, The Volkswagen Group announced that it was planning to invest EUR 73 billion in electrified models, hybrid powertrains, and digital technology until 2026.

Recent Developments

  • In March 2021, Nissan was working on a mild-hybrid GT-R model, which is expected to launch in late 2022. This GT-R would have a 48-volt mild-hybrid system that is likely to be paired with the current GT-R’s 3.8-litre twin-turbocharged V6 engine. It is supposedly codenamed GT-R R36.
  • In October 2021, Mercedes-Benz unveiled its two models, GLE and GLE Coupé, as diesel mild hybrids. They are equipped with the current four-cylinder diesel engine (OM 654 M) with an integrated second-generation starter-generator (ISG) and deliver 200 kW/272 hp. The current OM 654 M engine is equipped with a second-generation integrated starter-generator (ISG). The ISG includes a 48-volt electrical system.
  • In October 2020, BMW AG announced it would be launching 25 hybrid electric vehicle models across the world by 2023.
  • In August 2020, Paice, a hybrid vehicle technology provider, announced it had signed an agreement to license its patented hybrid technology to Mitsubishi Motors.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Drivers

    2. 4.2 Market Restraints

    3. 4.3 Industry Attractiveness-Porter's Five Forces 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

  5. 5. MARKET SEGMENTATION

    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. 5.3.1.1 United states

        2. 5.3.1.2 Canada

        3. 5.3.1.3 Rest of North america

      2. 5.3.2 Europe

        1. 5.3.2.1 Germany

        2. 5.3.2.2 United Kingdom

        3. 5.3.2.3 France

        4. 5.3.2.4 Italy

        5. 5.3.2.5 Norway

        6. 5.3.2.6 Netherlands

        7. 5.3.2.7 Rest of Europe

      3. 5.3.3 Asia-Pacific

        1. 5.3.3.1 China

        2. 5.3.3.2 India

        3. 5.3.3.3 Japan

        4. 5.3.3.4 South Korea

        5. 5.3.3.5 Rest of Asia-Pacific

      4. 5.3.4 Rest of the World

        1. 5.3.4.1 South America

        2. 5.3.4.2 Middle East & Africa

  6. 6. COMPETITIVE LANDSCAPE

    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

  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

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Frequently Asked Questions

The Hybrid Vehicle Market market is studied from 2018 - 2027.

The Hybrid Vehicle Market is growing at a CAGR of 28.9% over the next 5 years.

The Hybrid Vehicle Market is valued at 324 Billion USD in 2018.

The Hybrid Vehicle Market is valued at 1490 Billion USD in 2027.

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

Asia-Pacific holds highest share in 2021.

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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