Hybrid Electric Vehicle (HEV) Market Size 2024-2028 

The hybrid electric vehicle (HEV) market size is forecast to increase by USD 456.4 billion at a CAGR of 23.87% between 2024 and 2028. The market is experiencing significant growth due to the push toward the adoption of eco-friendly vehicles, driven by increasing environmental concerns and stringent emissions regulations. Fuel cell HEVs, which utilize hydrogen as an alternative fuel, represent an upcoming trend in the market, offering zero-emission mobility and extended driving ranges. However, the high total cost of ownership of HEVs remains a challenge, which is being addressed through technological advancements and government incentives. These factors, among others, are shaping the future growth dynamics of the global HEV market.

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The market is witnessing significant growth due to the increasing demand for vehicles with reduced emissions and improved fuel efficiency. HEVs combine the benefits of both internal combustion engines (ICEs) and electric propulsion systems. In an HEV, a gasoline engine powers an electric motor, which in turn charges the battery. The electric motor assists the ICE during acceleration and can power the vehicle during low-speed cruising and regenerative braking. Battery technology plays a crucial role in HEVs, with lithium-ion batteries being the most commonly used due to their high energy density and long life. HEVs come in various types, including full hybrids, mild hybrids, parallel hybrids, series hybrids, plug-in hybrids, and vehicle-to-grid systems.

OEMs are continuously innovating to improve battery technology and design to make HEVs more efficient and cost-effective. HEVs offer several advantages over conventional cars, including lower vehicle emissions, improved fuel efficiency, and the ability to capture energy during braking and store it in the battery for later use. The market for HEVs includes gasoline hybrid vehicles, electric vehicles, and public transit vehicles. The electric powertrain in HEVs consists of an electric motor, battery, and power electronics, which work in parallel or series with the ICE and chassis. The future of HEVs looks promising as governments and consumers continue to focus on reducing carbon emissions and improving fuel efficiency.

Market Segmentation

The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.

• Vehicle Type
  • Passenger cars
  • Commercial vehicles
• Propulsion
  • Full HEVs
  • Mild HEVs
  • PHEVs
• Geography
  • APAC
    • China
  • Europe
    • Germany
    • UK
    • France
  • North America
    • US
  • South America
  • Middle East and Africa

By Vehicle Type Insights

The passenger cars segment is estimated to witness significant growth during the forecast period. The market encompasses the production, sales, and adoption of vehicles integrating both internal combustion engines (ICE) and electric propulsion systems. ICEs, such as gasoline engines, generate power to charge the electric motor, which assists in propelling the vehicle. Regenerative braking recaptures energy lost during deceleration, storing it in the battery for later use. Vehicle-to-Grid (V2G) technology enables HEVs to feed stored electricity back into the power grid during off-peak hours. Battery technology, primarily lithium-ion batteries, powers electric motors and stores excess energy. Full hybrids, mild hybrids, and plug-in hybrids (PHEVs) are various HEV classes. Series HEVs use the electric motor as the primary source of power, while parallel and combination HEVs employ the gasoline engine for primary propulsion.

Passenger cars, commercial vehicles, and two-wheelers all utilize HEVs for improved performance and reduced emissions. Financial incentives, including tax incentives, grants, and subsidies, encourage their adoption. HEVs contribute to meeting emission standards, mitigating climate change, and reducing air pollution by decreasing greenhouse gas emissions, carbon dioxide, nitrogen oxides, and particulate matter. Traffic congestion alleviation is another significant advantage. Infotainment options and renewable energy sources, such as solar and wind energy, enhance HEV performance. Fleet adoption and OEMs' continuous advancements in battery technology drive market growth. Electric vehicles (EVs) and battery-electric vehicles (BEVs) are extensions of the HEV market, focusing solely on electric propulsion.

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The Passenger cars segment accounted for USD 51.90 billion in 2018 and showed a gradual increase during the forecast period.

Regional Insights

APAC is estimated to contribute 39% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

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The market encompasses various types of hybrid vehicles, including mild hybrids, full hybrids, and plug-in hybrids. Mild hybrids use electric motors to assist the Internal Combustion Engine (ICE) during acceleration, while full hybrids can switch between the ICE and electric powertrain. Plug-in hybrids can be charged from an external power source, allowing for extended electric-only operation. Batteries play a crucial role in storing electric energy for these vehicles. Conventional cars emit substantial greenhouse gases, making hybrid vehicles an attractive alternative. Battery Electric Vehicles (BEVs) are another eco-friendly option, but they lack the range and refueling convenience of hybrids. Public transit vehicles, particularly buses, have adopted hybrid technology to reduce emissions and improve fuel efficiency.

The hybrid powertrain consists of a chassis, powertrain, and electronics. Parallel hybrids use the electric motor to power the vehicle and the ICE to generate electricity, while parallel series hybrids use both the ICE and electric motor to power the vehicle. The hybrid's ability to switch between power sources makes it a versatile and efficient transportation solution.

Our hybrid electric vehicle (HEV) market researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

Hybrid Electric Vehicle (HEV) Market Driver

The push toward adoption of green (eco-friendly) vehicles is the key driver of the market. Hybrid Electric Vehicles (HEVs) have emerged as a significant solution to address the environmental concerns arising from the increasing use of on-road vehicles, which contribute substantially to greenhouse gas (GHG) emissions, primarily in the form of carbon dioxide (CO2). The primary objective is to reduce the fuel consumption of vehicles, thereby decreasing their CO2 emissions. HEVs operate using a combination of internal combustion engines (ICEs) and electric propulsion systems, featuring an electric motor that assists the gasoline engine or even powers the vehicle alone in certain conditions. Regenerative braking technology recaptures energy during deceleration, storing it in batteries for later use.

Moreover, HEVs come in various categories, including full hybrids, mild hybrids, and plug-in hybrids. Full hybrids can operate solely on electric power, while mild hybrids offer limited electric propulsion. Plug-in hybrids can be charged externally, extending their all-electric range. The battery technology, predominantly lithium-ion batteries, powers the electric motor and stores electricity generated during regenerative braking. The market for HEVs comprises passenger cars, commercial vehicles, and two-wheelers. Financial incentives such as tax incentives, grants, and subsidies, coupled with stringent emission standards, are driving the adoption of HEVs. Renewable energy sources like solar and wind energy are being integrated into HEVs, further enhancing their eco-friendliness.

The performance of HEVs is also being improved through series, parallel, and combination hybrid configurations. Gasoline hybrid vehicles, manufactured by Original Equipment Manufacturers (OEMs), are increasingly popular due to their fuel efficiency and reduced emissions. Electric vehicles (EVs), another eco-friendly alternative, are also gaining traction. As the world grapples with climate change, air pollution, and traffic congestion, the adoption of HEVs and other green vehicles is crucial to mitigate the negative impact of on-road vehicles on the environment. Infotainment options and the integration of renewable energy sources further enhance the appeal of these vehicles.

Hybrid Electric Vehicle (HEV) Market Trends

Hydrogen as an upcoming alternative fuel is the upcoming trend in the market. Hybrid Electric Vehicles (HEVs) represent the future of sustainable transportation, integrating both Internal Combustion Engines (ICEs) and Electric Propulsion Systems. HEVs come in various forms, including Full Hybrids, Mild Hybrids, and Plug-in Hybrids. Full hybrids use an electric motor and a gasoline engine, while mild hybrids employ an electric motor to enhance the performance of a gasoline engine. Plug-in hybrids can be charged externally, providing extended electric-only driving range. HEVs use batteries, primarily Lithium-ion, to store electricity. Regenerative braking recaptures energy lost during braking and charges the battery. Vehicle-to-Grid technology allows HEVs to feed excess electricity back into the power grid.

Additionally, the market for HEVs includes Passenger Cars, Commercial Vehicles, and Two-wheelers. Financial incentives such as Tax Incentives, Grants, and Subsidies drive market growth. Emission standards, Climate Change, Air Pollution, and Greenhouse Gas Emissions are significant factors fueling the demand for HEVs. Infotainment options and Renewable Energy Sources, such as Solar Energy and Wind Energy, further enhance the appeal of HEVs. Fleet adoption and Performance Enhancements are also key trends in the HEV market. OEMs are investing in Electric Vehicles and Battery technology to meet the growing demand. Fuel Cell Vehicles (FCVs) or Fuel Cell Electric Vehicles (FCEVs) are an emerging trend in the HEV market.

FCVs use a fuel cell to generate electricity, producing only water and heat as emissions. Toyota and Hyundai are pioneers in this technology, with Toyota producing hydrogen FCVs commercially and Hyundai leasing its FCVs on a limited basis since 2015. The FCV market is poised for significant growth as more manufacturers enter the market.

Hybrid Electric Vehicle (HEV) Market Challenge

The high total cost of ownership of HEVs is a key challenge affecting the market growth. Hybrid Electric Vehicles (HEVs) integrate internal combustion engines with electric propulsion systems, utilizing a gasoline engine and an electric motor for power. Regenerative braking recaptures energy during deceleration, charging the high-capacity batteries. Battery technology, primarily Lithium-ion batteries, powers electric-only modes and enhances vehicle performance. HEVs come in various types, including full hybrids, mild hybrids, and plug-in hybrids, catering to passenger cars, commercial vehicles, and two-wheelers. The total cost of ownership for HEVs is higher than traditional Internal Combustion Engine (ICE) vehicles due to the expensive batteries and advanced electronics components. For instance, the Nissan Leaf, a popular economic hybrid, features a 24 kWh battery priced at USD12,000, while a plush sedan model of an ICE car can be purchased for a similar amount.

However, the Chevrolet Volt, another hybrid, adds USD5,000 to the cost with its 6 kWh battery pack. Financial incentives, such as tax incentives, grants, and subsidies, help offset these costs. HEVs contribute to emission reduction, addressing climate change, air pollution, and greenhouse gas emissions, including carbon dioxide, nitrogen oxides, and particulate matter. Traffic congestion mitigation is another advantage. Infotainment options and renewable energy sources, like solar and wind energy, further enhance HEV appeal. Fleet adoption and OEMs continue to invest in improving battery technology, performance enhancements, and electric vehicles, ensuring a sustainable future.

Exclusive Customer Landscape

The market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.

 Customer Landscape

Key Companies & Market Insights

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

Chongqing Changan Automobile Co. Ltd. - The company offers hybrid electric vehicles such as Changan UNI K iDD. Also, the company is engaged in the production of passenger cars, microvans, commercial vans, and light trucks.

The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:

• AB Volvo
• Bayerische Motoren Werke AG
• BYD Co. Ltd.
• Ford Motor Co.
• General Motors Co.
• Honda Motor Co. Ltd.
• Hyundai Motor Co.
• Li Auto Inc.
• Mercedes Benz Group AG
• Mitsubishi Motors Corp.
• Nissan Motor Co. Ltd.
• Renault SAS
• SAIC Motor Corp. Ltd.
• Stellantis NV
• Suzuki Motor Corp.
• Tata Sons Pvt. Ltd.
• Toyota Motor Corp.
• Volkswagen AG
• Zhejiang Geely Holding Group Co. Ltd.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Research Analyst Overview

The market is witnessing significant growth due to the increasing concern towards reducing emissions and improving fuel efficiency. HEVs integrate both internal combustion engines (ICEs) and electric propulsion systems, with a gasoline engine acting as a generator to charge the battery, and an electric motor assisting in powering the vehicle. Regenerative braking is another key feature that helps recharge the battery during deceleration. Battery technology plays a crucial role in HEVs, with lithium-ion batteries being the most common choice due to their high energy density and long life. HEVs come in various types, including full hybrids, mild hybrids, plug-in hybrids, series HEVs, parallel HEVs, and combination HEVs.

These vehicles cater to the needs of passenger cars, commercial vehicles, and two-wheelers. Government initiatives, such as financial incentives, tax incentives, grants, and subsidies, are driving the adoption of HEVs. Emission standards, climate change, air pollution, and greenhouse gas emissions are major factors fueling the demand for HEVs. The integration of vehicle-to-grid technology allows HEVs to store electricity and feed it back to the grid during peak demand periods. Infotainment options, performance enhancements, and the use of renewable energy sources, such as solar and wind energy, are additional features attracting consumers to HEVs. The OEMs are continuously innovating to meet the evolving needs of consumers and reduce the environmental impact of transportation.

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What are the Key Data Covered in this Market Research and Growth Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting between 2024 and 2028
• Precise estimation of the size of the market  and its contribution of the market in focus to the parent market
• Accurate predictions about upcoming market growth and trends and changes in consumer behaviour
• Growth of the market across APAC, Europe, North America, South America, and Middle East and Africa
• Thorough analysis of the market's competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of market companies

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