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

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

The Hybrid Vehicle Market was valued at USD 252.06 billion in 2020 and is expected to reach a value of USD 1166.65 billion by 2026, registering a CAGR of 29.13% during the forecast period.

The outbreak of COVID-19 has hindered the growth of the hybrid vehicle market with continuous lockdowns and the subsequent economic slowdown across the world. In addition, the cost of hybrid vehicles and lack of charging infrastructure may also hinder the market's growth rate in emerging economies, as cost-sensitive customers find conventional IC engine vehicles affordable.

However, the sales of hybrid electric vehicles improved post June 2020 as lockdown lifted in most countries and forecasted 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 united states sales, and it plans to launch new models of hybrid electric vehicles in 2022.

Major factors driving the growth of the market are growing environmental concerns, enactment of stringent emission and fuel economy norms, and increasing government initiatives (in terms of subsidies, tax rebates and benefits), increase in R&D efforts of major companies in Hybrid Electric Vehicles during the forecast period.

Across the regions in Asia Pacific,China holds significant share in market owing to highest vehicle sales. Investments of foreign companies in developing nations and increasing awareness about benefits of hybrid vehicles is likely to have a positive impact on this regional market. Currently, vehicle manufacturers such as Toyota and Honda have been dominating the hybrid vehicle segment in China, with their models such as Toyota Corolla Hybrid and Honda Accord Hybrid. In the first three quarters of 2019, Corolla Hybrid sold 38,540 units in China, which has accounted for nearly 20% increase of total hybrid deliveries during the period

Key Market TrendsIncreasing Government Subsidies and Policies to Drive 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 was 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 for hybrid vehicle market is rising in developing countries such as Mexico, India, Brazil due to stringent emission regulation standards and the growing demand for low or zero-emission vehicles. Recently government of India announced an outlay of 10,000 crore for Phase 2 of FAME 2 scheme, to promote setting up of charging stations infrastructure and e mobility in country. The Brazilian government is encouraging the purchase of hybrid vehicles such as plug-in hybrid, hybrid electric, and CNG hybrid by reducing the tax rate.

As Climate change rose to the top of many European governments’ agendas. The United Kingdom committed to a target of net zero emissions by 2050 and proposed a ban on the sale of all polluting vehicles by2035.Germany plans to cut greenhouse gas emissions by 40 per cent by the end of 2020, by 55 per cent by the end of 2030 and up to 95 per cent by the end of 2050, compared to 1990 levels supporting market growth.

The governments in the US and Europe are 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 the Corporate Average Fuel Economy (CAFE) standards for vehicles. Electric and hybrid modes of transport are gaining momentum in the Gulf region and particularly in Israel, Jordan, Oman, Saudi Arabia, and UAE. 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.

China to Lead Hybrid Vehicle Market

China registered the highest growth rate in the market for hybrid and electric vehicles. 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 by 2020, including Guangzhou, Zhuhai, Dongguan, Foshan, and Zhongshan in the Pearl River Delta, along with Nanjing, Hangzhou, Shaanxi, and Shandong.

In February 2020, Honda Motor Company, Ltd. has 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, which results a better fuel efficiency and smooth drive. For instance, The Chinese government is 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, form July 2020, which results in supporting the demand of micro hybrid vehicles in this region.

Owing to the above trends, major automotive companies are planning to invest in the Chinese market, in order to take advantage of the strong demand for hybrid and electric vehicles in the country. Nissan, BYD, Honda, Dongfeng, and Toyota motor have all announced to continue their investment plans in the Chinese market during the forecast period.

Competitive Landscape

The hybrid vehicle market is mainly dominated by some of the major automotive players, such as Toyota, Nissan, Honda, BYD, Mitsubishi, BMW, Ford, etc., of which, Toyota, Nissan, and Honda, holding a significant market share of the hybrid vehicle market, globally.

The companies are making new strategic partnerships, investing majorly in R&D projects, and launching new products in the market for being ahead of their rivalries. For instance,

• Ford is investing USD 11 billion in electrification, with plans to add 40 hybrid and fully electric vehicles to its lineup by 2022.
• Toyota Prius was the world's first mass-produced hybrid car, and the firm has sold 13 million hybrid cars since its introduction. The company has taken strategic step to promote hybrid cars as a bridge to fully electric vehicles.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
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Companies Mentioned

IBM Corporation
Oracle Corporation
Internap Corporation
Packet Inc. (An Equinix Inc. Company)
Scaleway Inc.
Amazon Web Services Inc
Rackspace Inc.
CenturyLink, Inc.
LightEdge Solutions, Inc

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