The hybrid electric car market size is expected to advance at a CAGR of 20.1% during 2022–2030, to reach 9.9 million unit sales by 2030.
Due to strict emission control regulations and the surging desire for low- or zero-emission vehicles, the hybrid vehicle industry is experiencing the rise in demand in developing nations, such as Mexico, India, and Brazil.
The Indian government recently announced that FAME II, a famous program designed to promote electric mobility throughout the nation, would be extended through 2024. In a similar vein, the Brazilian government is promoting the purchase of hybrid vehicles by lowering the tax rate, including plug-in hybrids, hybrid electric vehicles, and CNG hybrids.
Penetration of the hybrid electric car in emerging economies, such as China, India, Indonesia, Brazil, and South Korea, is at the high adoption stage. However, there is a high scope for growth in developing countries, owing to stringent emission norms, high gasoline prices, and high demand for passenger cars in these regions. Most of the key emerging economies are adopting EU emission standards and planning to ban petrol and diesel cars in the coming years.
For example, India announced to end the sale of gasoline and diesel cars by 2030. Similarly, China is also planning to ban the production and sale of vehicles powered only by fossil fuels. Many automakers are planning to enter these markets with their new and existing hybrid car models.
For instance, Maruti Suzuki is moving from mild hybrids to strong hybrids and electric vehicles (EVs), with a target to release its first one by 2025. Similarly, Toyota plans to produce more advanced hybrid electric cars in India and China in the coming years. In addition, many battery manufacturers are aiming at setting up battery plants for electric vehicles in these countries, which would assist the growth of the hybrid car market.
Europe will grow at a significant CAGR during the forecast period owing to government support in the form of subsidies and stringent emission norms. In addition, increased and improved offerings from automakers and the growing sense of environmental concern among customers have further catalyzed the demand of the market in the region. The demand is also driving by high fuel prices, declining diesel car sales, and countries’ long-term plans to phase out conventional passenger cars in the region.
The market growth in the European region is driven by the government’s financial and non-financial incentives, such as subsidies for EVs, road tax exemption, congestion charge waiver, and free parking. In addition, environmental awareness among customers further fueled the market demand. The demand is expected to continue during the forecast period, owing to a continuous decline in the sales of diesel vehicles in the European region after the Volkswagen emission scandal in September 2015.
Automakers such as Renault, Volkswagen, PSA, Mercedes-Benz, and Volvo have plans to launch advanced models in Europe in the coming years.
Besides, many countries in Europe have plans to ban gasoline and diesel cars in the long run, which is expected to increase the demand in the region. For instance, countries such as the Netherlands, France, the U.K., Norway, and Scotland plan to ban the sale of gas and diesel cars over the 2025-2040 period. Moreover, initiatives, such as lower company car taxes, ultra-low emission discounts, and increased capital allowances, will drive the demand in the region.
The key hybrid electric car market players are Toyota Motor Corporation, Honda Motor Co. Ltd, Bayerische Motoren Werke (BMW) Group, Ford Motor Company, Volkswagen AG, General Motors Company, Hyundai Motor Company, AB Volvo, Kia Motors Company, and Nissan Motor Company.