Hybrid Vehicle Market is Rapidly Growing at a CAGR 28.80% By 2032

Published Date : 15 Apr 2024

The global hybrid vehicle market size surpassed USD 513.2 billion in 2023 and is estimated to gain around USD 5006.35 billion by 2032, growing at a CAGR of 28.80% from 2023 to 2032. The hybrid vehicle market is attributed to reducing greenhouse emissions and increasing concerns about climate change.

Hybrid Vehicle Market Size and Growth Rate From 2023 to 2032

Market Overview

The hybrid vehicle market deals with the design, manufacturing, distribution, and maintenance of hybrid vehicles. The market is also responsible for the production of spare parts needed for repair and maintenance. Hybrid vehicles are enhanced by a combination of one or more electric motors, an Internal Combustion Engine, and energy stored in batteries.

The fuel economy law, stringent emissions, reduced costs of electric batteries, and increasing adoption of hybrid vehicles are the major drivers that will help boost the growth of the market. Due to the need for more fuel-efficient transportation options and increasing concern for the environment, hybrid vehicles have become a popular choice for customers or buyers. Government regulations and initiatives are also responsible for driving the growth of the market.

Fuel economy and eco-friendly approach to drive the hybrid vehicle market growth

The fuel economy offered by hybrid vehicles is one of the major reasons people buy them. Consumers will be spending much less on gas each month because hybrid cars cover approximately 30 miles more per gallon than traditional vehicles. Due to the fluctuating gas prices, consumers can save so much on bundles. Hybrid cars are helping to reduce the greenhouse gases that are spoiling ozone, reducing other valuable natural resources, and reducing the world's reliance on oil. Hybrid vehicles create fewer emissions and use less gas.

In addition, the major benefit of purchasing hybrid vehicles is attractive tax incentives. Consumers are aware of federal tax incentives and discounts when registering hybrid vehicles. Consumers get a tax refund for purchasing their hybrid vehicles. These factors might be driving the demand and growth of the hybrid vehicle market.

However, the cost of battery replacement may restrain the growth of the hybrid vehicle market. Many electric vehicles and hybrid cars use batteries that contain precious metals that can only be extracted in specific areas of the world. Due to the infrequency of these materials, the batteries in hybrid vehicles are expensive to replace.

Hybrid Vehicle Market Report Scope

Report Coverage Details
Market Revenue in 2023 USD 513.2 Billion
Projected Forecast Revenue by 2032 USD 5006.35 Billion
Growth Rate from 2023 to 2032 CAGR of 28.80%
Base Year 2022
Forecast Period 2023 to 2032
Regions Covered North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa

Hybrid Vehicle Market Key Players

  • AB Volvo
  • Maruti Suzuki Company
  • Ford
  • Volkswagen AG
  • Nissan Motor Company
  • Kia Motors Company
  • Ford Motors Company
  • Lexus
  • BYD Company Ltd.
  • Honda Motor Company
  • Toyota Motor Company

Recent Development by Maruti Suzuki

  • In July 2023, in India, Maruti Suzuki launched its most expensive hybrid 4-wheeler car with the name Invicto. This 4-wheeler hybrid car started from Rs. 24.79 lakh to Rs. 28.42 Lakh. This Invicto model was retailed by India’s premium channel, Maruti Suzuki NEXA.
  • In February 2023, Maruti Suzuki announced the launch of 35kpl+ Fronx hybrid 4-wheeler cars. This launch was powered by Maruti Suzuki’s in-house series hybrid technology. This launch of hybrid cars will occur in 2025.

Recent Development by Volkswagen AG

  • In February 2024, the CEO of a local Volkswagen unit announced the plan to launch entry-level EVs and hybrid vehicles if the company gets government support.

Regional Insights

Asia Pacific is estimated to grow fastest in the forecast period. Hybrid vehicles are on the edge of mass adoption in the Asia Pacific region. According to the survey of the Automotive Ecosystem Vision Study in August and September 2022, Zebra Technologies said that automotive manufacturers are under pressure to accommodate customer’s rising preference for hybrid vehicles in the coming future.

In Asia Pacific, spanning multiple generations has been boosting the force behind automotive producers’ acceleration in technological advancement. Customers are also boosting the importance of personalization and the ability to customize a hybrid vehicle to their choice.

In China, the major global hybrid vehicle manufacturer is responsible for major shares of the Asia Pacific region. Robust hybrid vehicle offerings are gaining in the purchasing demand. This modern trend is significantly motivating for global auto manufacturers such as Honda and Toyota, which are aspiring to diverse electrification policies. Toyota is the leading manufacturer and sees one-third of complete vehicle sales as hybrid vehicles, reporting a significant growth in hybrid vehicle sales.

In South Korea, market growth can be anticipated by the increased sales of hybrid vehicles. South Korea has a rich automotive industry. This country is the world’s fifth-largest automobile manufacturer. The South Korean government actively responded by offering incentives and subsidies and investing in charging infrastructure to enhance the hybrid electric vehicles market. South Korea’s hybrid electric vehicle policy is overseen by three ministries: the Ministry of Energy, industry, and trade for electric vehicles.

The South Korean government actively supports the electric vehicle industry with incentives like R&D spending, financial aid, and tax breaks. South Korean government has consistently updated its HEV policies.

In India’s automotive industry, hybrid vehicles are also qualifying for subsidies and tax incentives offered by the Indian government to contribute to environmentally friendly transportation solutions. In India, hybrid cars are poised to play an important role in shaping the future of transformation. India can lead the transition towards a more sustainable future and towards greener and unlock the full potential of hybrid vehicles.

Market Potential and Growth Opportunity

Expansion of hybrid vehicle charging infrastructure 

The expansion of hybrid vehicle charging infrastructure is making operating and owning a vehicle easier for consumers, which is motivating the use of hybrid cars. There has been a significant growth in the number of public charging stations, giving hybrid car owners convenient access to refueling their gas. In addition, the installation of charging stations is becoming modern in residential offices and complexes, supplying even more convenience and accessibility.

The improvement of structure for charging vehicles takes care of the essential part of owning one, increasing the general use of these eco-friendly cars and easing worries regarding range anxiety in multiple situations. The industry's dynamic reaction to the changing needs of hybrid car consumers is seen in the coordinated efforts to develop strong charging connections. These are the opportunities that may drive the hybrid vehicle market growth in the coming years.

Hybrid Vehicle Market News

  • In August 2023, in India, Toyota launched a new Vellfire Hybrid MPV. This Vellfire 4-wheeler car was worth Rs 1.19 Crore.
  • In September 2023, Renault company has announced the launch of strong hybrid cars in India. These cars will be in India very soon.
  • In April 2023, in Mexico, MG Motor launched a plug-in hybrid SUV model. In Mexico, the MG Motors eHS model was sold for USD 45,610. The increasing opportunity for the hybrid vehicle market was identified for this launch.

Market Segmentation

By Hybridization

  • Fully hybrid
  • Micro hybrid
  • Mild hybrid

By Drivetrain

  • Parallel drivetrain
  • Series drivetrain

By Vehicle

  • Passenger car
  • Commercial vehicles

By Propulsion

  • HEV
  • PHEV
  • NGV

By Component Type

  • Battery
  • Electric Motor
  • Transmission

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