The global Hybrid Electric Vehicle (HEV) market size was estimated at USD 79.2 billion in 2023 and is projected to reach USD 337.2 billion in 2030 at a CAGR of 23.1% during the forecast period 2023-2030.
One of the primary drivers is the implementation of strict pollution and eco-friendliness regulations by governments across the world. These regulations are aimed at reducing the harmful emissions from vehicles and promoting the use of cleaner technologies. Another factor that is driving the market's growth is the government incentives and subsidies that are being offered to encourage the purchase and use of hybrid vehicles. These incentives can take the form of tax credits, rebates, or other financial incentives that make hybrid vehicles more affordable for consumers. The growing awareness among the public about the harmful effects of vehicle emissions is also contributing to the market's growth. As people become more conscious of the impact of their actions on the environment, they are more likely to choose hybrid vehicles over traditional gasoline-powered vehicles. In response to the increasing regulatory pressure and consumer demand, automakers are investing heavily in the development of hybrid and electric vehicles. This has led to the introduction of new models with advanced features, improved performance, and better mileage.
The reason behind this development is the fact that hybrid vehicles emit fewer greenhouse gases compared to fuel and diesel vehicles, making them more eco-friendly. Governments in the United States and Europe are also contributing to this trend by reducing emission limitations and promoting vehicle eco-friendliness through regulations and incentives. For example, the US Department of Transportation has introduced Corporate Average Fuel Economy (CAFE) models to encourage automakers to produce more fuel-efficient vehicles. The combination of stricter regulations and government incentives is expected to drive the growth of the hybrid and electric vehicle market in the coming years. Major automakers are also investing in research and development to create innovative vehicles with better performance, quieter operations, and improved mileage.
The COVID-19 pandemic has had a negative impact on the hybrid electric vehicle industry, as it has caused persistent lockdowns and closures of manufacturing units. This has resulted in a reduction in the production levels of these vehicles. In addition to the lockdowns, there have also been supply chain difficulties that have led to an increase in the cost of hybrid vehicles. Despite these challenges, there has been an increase in the sales of hybrid electric vehicles after June 2020, when the lockdowns in many countries were lifted. This could be due to a growing awareness of the benefits of hybrid vehicles, such as their lower emissions and better fuel efficiency.
Governments to promote the use of electric vehicles and reduce greenhouse gas emissions. These measures include regulations and incentives to encourage the adoption of electric vehicles, as well as the establishment of public charging stations to support their use. The increased use of electric components and engine systems in vehicles is driving demand for vehicle batteries, which are a critical component in providing power to these systems. The adoption of green technologies like hybrid and all-electric drive systems is further increasing the demand for car batteries. The cost of vehicle batteries is rapidly decreasing, making them more affordable and accessible to consumers. One of the primary reasons for the growing demand for HEVs is the rising levels of air pollution caused by vehicle exhaust emissions. This has led to increased awareness among the general public about the harmful effects of pollution on health and the environment. Another factor contributing to the popularity of HEVs is the trend of rising urbanization, which has led to increased traffic congestion and pollution in cities. HEVs are seen as a more environmentally friendly alternative to traditional gasoline-powered vehicles.
Additionally, the increasing purchasing power of individuals has made HEVs more accessible to a wider range of consumers. As the cost of HEVs continues to decrease, more people are opting for these vehicles as a more sustainable and cost-effective option. The development of road infrastructure and the expansion of road networks have also contributed to the growth of the HEV market. As more roads are built and existing ones are improved, the demand for vehicles that are more fuel-efficient and environmentally friendly is expected to increase.
North America to Dominate the Market