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

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  • 110 Pages
  • February 2022
  • Region: Global
  • Mordor Intelligence
  • ID: 4515633
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.

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.

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.

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.

Additional Benefits:

  • The market estimate (ME) sheet in Excel format
  • 3 months of analyst support

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Table of Contents

1.1 Study Assumptions
1.2 Scope of the Study
4.1 Market Drivers
4.2 Market Restraints
4.3 Industry Attractiveness-Porter's Five Forces Analysis
4.3.1 Bargaining Power of Suppliers
4.3.2 Bargaining Power of Consumers
4.3.3 Threat of New Entrants
4.3.4 Threat of Substitute Products
4.3.5 Intensity of Competitive Rivalry
5.1 Hybrid Type
5.1.1 Micro-hybrid
5.1.2 Mild-hybrid
5.1.3 Full-hybrid
5.1.4 Plug-in Hybrid
5.2 Vehicle
5.2.1 Passenger Cars
5.2.2 Commercial Vehicles
5.3 Geography
5.3.1 North America United states Canada Rest of North america
5.3.2 Europe Germany United Kingdom France Italy Norway Netherlands Rest of Europe
5.3.3 Asia-Pacific China India Japan South Korea Rest of Asia-Pacific
5.3.4 Rest of the World South America Middle East & Africa
6.1 Vendor Market Share
6.2 Company Profiles
6.2.1 Toyota Motor Corporation
6.2.2 Nissan Motor Co. Ltd
6.2.3 Honda Motor company Ltd
6.2.4 Hyundai Motor Company
6.2.5 Kia Motors Corporation
6.2.6 Diamler AG
6.2.7 Volvo Group
6.2.8 Volkswagen Group
6.2.9 BMW AG
6.2.10 Ford Motor Company
6.2.11 Mitsubishi Motors Corporation
6.2.12 BYD Co. Ltd

Companies Mentioned

A selection of companies mentioned in this report includes:

  • Toyota Motor Corporation
  • Nissan Motor Co. Ltd
  • Honda Motor company Ltd
  • Hyundai Motor Company
  • Kia Motors Corporation
  • Diamler AG
  • Volvo Group
  • Volkswagen Group
  • BMW AG
  • Ford Motor Company
  • Mitsubishi Motors Corporation
  • BYD Co. Ltd