Hybrid Electric Vehicles Market Size, Share & Growth [2031]

Report Description

Market Outlook:

The global hybrid electric vehicles market was valued at USD 272.3 Billion in 2022 and is projected to reach USD 1,111.2 Billion by 2031, expanding at a CAGR of 17.2% during the forecast period.

The global hybrid electric vehicles market volume is estimated at 64,81,029 units in 2022 and is projected to reach 1,81,27,414 units in 2031.

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A hybrid vehicle uses two types of power sources, such as an electric motor and an internal combustion engine or an electric motor combined with a battery and fuel cells for energy storage. This vehicle uses less fuel and emits less CO2 than conventional petrol and diesel engine vehicles.

Hybrid vehicle uses several technologies, including regenerative brakes, which convert the kinetic energy of the vehicle to electrical energy. Hybrid powertrains are designed to convert from one power source to another to maximize both fuel and energy efficiency.

In hybrid electric vehicles, the electric motor produces high torque or turning power and the combustion engine performs well for maintaining high speed. The three key benefits of hybridization are increased efficiency, lower emissions, and cheaper operating costs when compared to non-hybrid vehicles.

Macro-economic Factors

Economic growth:

Economic growth is one of the key macro-economic factors that influence the global hybrid electric vehicles market. The overall economic growth of countries and regions influences the market. Strong economic growth frequently results in increased industrial activity, which increases the demand for hybrid vehicles. Demand for advanced technologies in vehicles increases, as economies grow, which further influences the demand for hybrid vehicles. Fluctuations in oil prices directly impact the demand for hybrid vehicles, as consumers seek an improved alternative for fuel efficiency. The adoption of hybrid vehicles has several economic benefits, providing consumers with an affordable, convenient, and efficient mode of transportation. The ability of hybrid vehicles to use numerous sources of power makes them more trustworthy as compared to traditional vehicles that rely on a single source of power.

R&D Activities

Hybrid vehicles are rapidly evolving with significant R&D activities. At present, transportation systems around the world are shifting toward electric vehicles, which has created a need for research on hybrid vehicles as an intermediate technology source for the implementation of electric vehicles. This further created a wide scope for research and development for hybrid vehicles due to their potential benefits in terms of range anxiety, emissions, resale value, and simplicity of manufacture.

• For instance, Toyota Motor Corporation recently announced that it is investing more than EUR 11.6 billion in R&D of batteries, electric motors, and power control units for electrified vehicles between now and 2030. The focus of Toyota on electrification began more than two decades ago with the launch of self-charging hybrid vehicles. Its long-term objective is to reduce CO2 emissions and achieve true carbon neutrality over the entire life cycle of the vehicles it manufactures by 2050.

Technological Advancement:

Technological advancement is one of the major macro-economic factors that impacts the global hybrid electric vehicles market in various ways such as:

Advancement in Powertrain Technology

• The dual-mode hybrid system combines the power of a regular gasoline engine with an electric motor, allowing the vehicle to switch between the two power sources as needed. This system saves fuel consumption by up to 25%, depending on the driving circumstances.

• The autonomous driving systems are designed to enhance driving functions normally performed by humans, such as steering, accelerating, and braking. This technology has the potential to make driving safe, efficient, and pleasurable. Hybrid Electric Vehicles (HEV) autonomous driving systems are designed to detect barriers, other vehicles, and other possible hazards using the current sensors and processors of vehicles.

The automotive sector is going through a significant shift toward clean and efficient ways of transportation with hybrid technology. Toyota is one of the key manufacturers of hybrid vehicles that has consistently set the standards for hybrid innovation.

• For instance, self-charging hybrid electric vehicles of Toyota are powered by both a gasoline engine and an electric motor. The vehicles are driven using only electric power or with both the engine and the electric motor functioning simultaneously. Electricity is generated when driving the car, and it is captured from the energy released when the driver stops or slows down the car.

These technological advancements or innovations create immense opportunities and influence end-users to adopt hybrid vehicles rather than traditional vehicles.

Market Dynamics

Market Driver - Increasing Eco-friendly Initiatives to Reduce Fuel Emissions

Increasing eco-friendly initiatives to reduce fuel emissions is a significant driving factor in the hybrid electric vehicles market. Consumer demand for green automobiles has surged in the US over the last several years due to the increasing focus on electric and hybrid vehicles. Buyers desire for improved fuel efficiency and demand for environmentally friendly vehicles are driving the introduction and development of electric and hybrid versions of popular existing car models. The commercial transportation industry is gradually shifting toward green vehicles. Thus, manufacturers are seeking ways to capitalize on the efficiency prospects for hybrid drive in heavy vehicles. For instance, Ford Motor Company has prepared a top 10 list highlighting some of its most recent green initiatives. The sustainability plan of the company includes a focus on environmentally friendly vehicle technologies, such as hybrids, diesels, biodiesels, improved engines and transmissions, plug-in hybrids, and fuel cells. Furthermore, the company is implementing sustainable efforts across the corporation in manufacturing, materials, and facility management.

Market Restraint – High Cost Associated with the Hybrid Vehicles

The hybrid electric vehicles market is facing a cost challenge. The battery is the central component of a hybrid vehicle in plug-in hybrid vehicle. The battery raises the cost of vehicles, making them more expensive than diesel and gasoline-powered vehicles. The total price of the vehicle is depending on the cost of several parts, such as the battery and the regenerative brake. However, the cost of batteries has dropped significantly over the last few years. Additionally, battery manufacturers are taking initiatives and conducting R&D activities to reduce the cost of batteries. Moreover, the hybrid vehicles require less maintenance; however, if a vehicle goes for repair, it costs high, especially when the issue is related to the high voltage system. Thus, replacing a damaged or dead battery costs thousands of dollars, depending on the battery type and precise model of the car. In addition to the standard technology found in ICE vehicles, hybrid vehicles have several complex components ranging from large high-voltage battery packs and inverters to electric motors and enhanced cooling systems. These complex mechanisms raise the cost of hybrid repairs. Hybrid vehicles have a high initial cost; however, they offer long-term benefits, such as fuel efficiency and low maintenance costs.

Market Opportunity - Technological Advancements in Hybrid Vehicles

Technological advancements in hybrid vehicles to improve fuel efficiency, affordability, and addressing evolving needs is projected to create lucrative opportunities in the market during the forecast period. The transportation industry is evolving at a rapid pace and hybrid electric vehicles are at the forefront. Hybrid electric vehicles are becoming more popular as a viable alternative to regular gasoline-powered cars, as technical improvements continue to make them more economical and environmentally friendly. Hybrid engine technology drives developments in power management systems, electric motor efficiency, and battery technology. These advancements benefit hybrid vehicles and contribute to the overall development of electric powertrain technology. This technology is used to enhance fully electric vehicles and other applications outside of the automotive industry in the future. For instance, the Smart Hybrid of Maruti Suzuki is an advanced technology that improves fuel efficiency and driving performance. In manual and automatic gearboxes, the engine automatically stops at idle and starts silently when the proper conditions are met. It comes with two batteries, one of which is a lithium-ion battery. These high-capacity batteries store braking energy to help the idle start-stop and torque assist features of the engine.

Scope of the Report

The report on the global hybrid electric vehicles market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Segmental Outlook

The global hybrid electric vehicles market is segmented on the basis of type, powertrain, and vehicle type.

On the basis of type, the global hybrid electric vehicles market is segmented into full hybrids, mild hybrids, and plug-in hybrids. The full hybrids segment is expected to hold a significant market share during the forecast period due to the rising technological advancements to improve fuel efficiency and reduce emissions. Full hybrids vehicles have large batteries and powerful electric motors, allowing them to cover short distances at low speeds. These vehicles are more expensive than mild hybrids; however, they deliver superior fuel economy.

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In terms of powertrain, the hybrid electric vehicles market is bifurcated into parallel hybrids and series hybrids. The parallel hybrids segment is anticipated to hold a significant market share during the projection period due to the growing concerns about the global warming and strict pollution rules are being implemented across the globe. Vehicles equipped with parallel hybrid technology drive the wheels simultaneously with an engine and an electric motor, balancing performance and fuel efficiency. These vehicles are less expensive to manufacture, as they have a smaller battery and electric motor than other hybrid models. They do not require external charging, which makes them convenient for customers.

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Based on vehicle type, the global hybrid electric vehicles market is divided into passenger cars and commercial vehicles. The passenger cars segment is expected to expand at a considerable CAGR during the forecast period due to the increasing demand for environmentally friendly and fuel-efficient vehicles. Government initiatives are encouraging the use of hybrid vehicles, which contribute to the growth of this segment in the market. Moreover, the automotive industry is developing at a rapid pace, as major automobile manufacturers, such as Toyota, Honda, and Ford, are including hybrid technology frequently. Thus, the market for hybrid vehicles is expected to grow significantly in the near future.
 

Regional Outlook

On the basis of region, the global hybrid electric vehicles market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. North America is expected to hold a large share of the Global Hybrid Electric Vehicles Market due to increased transportation. North America has more registered vehicles than Western Europe. However, to travel short distances, road transit is more cost effective than train travel, as it provides door-to-door service. Furthermore, road freight transit is becoming increasingly popular. These increases pollution. Thus, the demand for hybrid vehicles is expected to rise. Furthermore, numerous automotive manufacturers are developing various technological advancements in hybrid vehicles, which are expected to improve desire for hybrid vehicles in this region.

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Key Benefits for Industry Participants & Stakeholders

• In-depth Analysis of the Global Hybrid Electric Vehicles Market

• Historical, Current, and Projected Market Size in terms of Value and Volume

• Potential & Niche Segments and Regions Exhibiting Promising Growth Covered

• Industry Drivers, Restraints, and Opportunities Covered in the Study

• Recent Industry Trends and Developments

• Competitive Landscape & Strategies of Key Players

• Neutral Perspective on Global Hybrid Electric Vehicles Market