Hybrid Electric Car Market Trends, Segmentation, Key Players And Forecast

[Business Point 2021]

The focus towards electric vehicles has risen significantly in the past few years, which can primarily be ascribed to the surging need for energy conservation, declining rate of fossil fuels, and increased negative impacts of carbon emissions on the environment. As people are becoming more regarding these factors, they have started looking for solutions which have less adverse effect on the environment. This, in turn, is compelling auto manufacturers to come up with mobility solutions that are eco-friendly, along with being cost-effective. All these factors are resulting in the growing demand for hybrid electric cars across the globe.

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Hybrid electric cars consist of an electric motor and an internal combustion engine (ICE). The battery pack in these cars are charged by regenerative braking and by the ICE. Since these cars function with both ICE and electric motors, their fuel efficiency is higher than cars that function solely on ICE. The popularity of hybrid electric cars has been increasing due to the fact that they are cheaper than other electric cars. This allows people to reduce carbon footprints without burning a hole their pockets, thereby leading to the growth of the hybrid electric car market.

Other than the general public, government authorities in various countries are also focusing towards taking initiatives for curbing air pollution and controlling emission levels. Strict emission norms are being implemented in several countries. For example, the European Commission has set a target to decrease carbon dioxide emissions by 20% by 2020. A number of European countries are becoming inclined towards increasing fuel efficiency of vehicles, which is why they are implementing carbon emission policies.

The global hybrid electric car market is predicted to generate a revenue of $138.0 billion by 2023, growing from $57.2 billion in 2017, registering a 16.7% CAGR during the forecast period (2018–2023). On the basis of hybridization, the market is bifurcated into mild and full, between which, the full category accounted for the larger share of the market in the past. This can be ascribed to the early introduction of these vehicles. Other than this, the demand for mild hybrid electric cars is also expected to rise during the forecast period, due to the lower price of these vehicles as compared to full hybrid electric vehicles.

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Between lithium-ion (Li-ion) and nickel metal hydride batteries, the Li-ion battery division is predicted to exhibit the higher CAGR during the forecast period, which is majorly due to the falling prices of these batteries. Moreover, Li-ion batteries have advantages such as high energy density, small size, low weight, and low maintenance cost. Geographically, Europe is predicted to grow at the fastest pace in the hybrid electric car market, as per a report by P&S Intelligence. This is because of the rising initiatives that are being taken by governments of various countries in the region.

In conclusion, the demand for hybrid electric vehicles is growing due to the surging concerns regarding the environment and rising government initiatives.