Global Hybrid Powertrain Market size
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The Global Hybrid Powertrain market was valued at USD 106.22 Billion in 2024 and is expected to reach USD 201.48 Billion by 2030 with a CAGR of 11.26% during the forecast period.
Moreover, stringent government regulations and better fuel efficiency of hybrid vehicles are expected to aid global hybrid powertrain market during forecast period. Powertrain assists in reducing vehicle emissions and fuel consumption, consequently driving the growth of global hybrid powertrain market. However, high production cost associated with powertrain is expected to emerge as a major challenge for the market in coming years.
Global hybrid powertrain market can be classified based on vehicle type and components. Based on the vehicle type, the market has been segmented into hybrid vehicles, mild hybrid vehicles and plug-in hybrid vehicles. Mild hybrid vehicle segment is expected to witness extensive adoption during the forecast period, as it helps to reduce fuel consumption.
Key Market Challenges
High Initial Cost
Even with technological advancements, hybrid cars remain to have a premium price tag over their conventional gasoline-powered versions. The fact that they combine an internal combustion engine and an electric motor, in addition to the expensive nature of batteries, leads to increased production costs. This difference in cost may discourage consumers, particularly those in price-conscious markets, from purchasing hybrid cars. Although the long-term fuel savings can pay for the increased upfront cost, not everyone may be willing to invest that money upfront, which could restrict the hybrid market's growth potential.
Limited Charging Infrastructure
Whereas hybrids benefit from the ability to use gasoline when electric power is low, plug-in hybrids (PHEVs) depend on charging infrastructure to function effectively. The absence of ubiquitous charging points, particularly in remote or underdeveloped areas, can prove to be a strong deterrent for the adoption of hybrid powertrains. In the absence of readily available charging points, consumers are likely to be discouraged from buying plug-in hybrids because of fear that recharging their cars will be an inconvenient task. An increase in charging facilities is necessary to grow the market share of plug-in hybrids and realize their full environmental benefits.
Battery Longevity and Disposal Issues
Battery durability is a major issue for hybrid cars, since batteries deteriorate with time. Although hybrid batteries are longer-lasting than electric vehicle batteries, they must eventually be replaced, and replacement is expensive. Buyers can be concerned about long-term maintenance and replacement expenses of hybrid cars. Also of concern are environmental issues surrounding the recycling and disposal of hybrid batteries as the number of hybrids increases on the roads. Battery waste management and making hybrid battery recycling available are issues that need to be handled by the industry to preserve consumer confidence.
Major Market Trends
Embedded Artificial Intelligence (AI) in Powertrain Management
The use of artificial intelligence (AI) in hybrid powertrain systems is revolutionizing the way energy is handled and distributed between the electric motor and the internal combustion engine. AI enables cars to make decisions in real-time depending on driving conditions, maximizing fuel efficiency and minimizing emissions. For instance, AI is able to forecast traffic patterns and vary the energy consumption accordingly, maximizing the use of the electric motor in stop-and-go traffic. As technology improves with AI, hybrid powertrains will continue to become more efficient, and consumers will gain even better fuel savings and performance.
Increased Options for Hybrid Powertrains
Manufacturers are now increasingly providing hybrid versions of their best-selling models, from the small cars to the SUVs and even the luxury cars. This growth enables the hybrid powertrains to appeal to a wider range of consumers who might prefer different types of vehicles. As hybrid technology gains mainstream acceptance, makers are engineering hybrids to suit the needs of diverse markets, from eco-friendly city residents to family buyers who want larger, more fuel-efficient vehicles. This is assisting hybrid cars in gaining wider appeal, driving the market's overall growth.
Next-Generation Batteries Development
Continued next-generation battery development is boosting hybrid powertrain performance. These new batteries are lighter, more energy-dense, and longer-lasting than existing ones, and they alleviate some of the usual worries about hybrid vehicle range and battery lifespan. Solid-state batteries, which are safer and more efficient than traditional lithium-ion batteries, are being researched intensely and are likely to be major players in the future of hybrid vehicles. The advanced battery technology will make hybrid powertrains even more desirable for customers by delivering enhanced range and less need for battery replacement.
Segmental Insights
Vehicle Type Insights
The passenger car segment ruled the world hybrid powertrain market in 2024. This segment enjoys the rising customer inclination toward fuel-efficient, eco-friendly, and cost-effective cars. As awareness of climate change increases and demand for sustainable alternatives rises, consumers are actively looking for alternatives to conventional gasoline and diesel-powered vehicles. Hybrid powertrains, which use electric motors and internal combustion engines, provide a compromise between fuel economy and driving range, making them the perfect option for daily commuters and families. The popularity of hybrid cars in urban areas is especially significant with their potential to lower emissions, increase fuel efficiency, and save on operating expenses, yet still be refueled at traditional gas stations.
Increased fuel prices and more stringent emissions regulations are adding pressure to the growth of the passenger car hybrid market. Governments are implementing tougher environmental regulations, compelling people to turn towards green alternatives. These needs are addressed by hybrid cars through lower emissions than conventional internal combustion engine cars, which allow automakers to meet regulatory requirements without going all the way to electric vehicles. With growing urbanization, demand for fuel-saving compact cars that can drive through crowded city roads with ease is growing, further fuelling hybrid powertrain sales in the passenger car segment.
Advancements in battery technology and broader model availability also have contributed to the dominance of this segment. Advances in battery technology have allowed for lighter, more durable, and less expensive batteries, further decreasing the overall cost of hybrid powertrains. With the broader availability of hybrid models across smaller cars through larger sedans, consumers can now select more options, thereby contributing to rising popularity of hybrids. Plug-in hybrid versions have also further extended the attraction with the facility for electric-only mode driving on shorter distances and, yet, with the freedom of a gas-powered engine on longer distances.
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Region Insights
In 2024, Asia-Pacific is the leading region for the world's hybrid powertrain market. This market is experiencing rapid growth as demand for fuel-efficient and environmentally friendly vehicles, spurred by a mix of urbanization, strict emissions controls, and government incentives, is on the rise. As the world's most populous region, Asia-Pacific has a fast-growing middle class with increased purchasing power and a rising emphasis on sustainability. Automotive industries in nations such as China, Japan, and South Korea are especially driving the transition to hybrid powertrains, with customers looking for substitutes for conventional internal combustion engine cars.
China is a key driver of the market expansion of hybrid vehicles across Asia-Pacific. The government has launched many policies to encourage the use of green vehicles, such as subsides on hybrid vehicles and incentives to producers to manufacture environmentally friendly automobiles. Tougher emission regulations and growing air pollution concerns in key metropolises have also fueled the transition to hybrid powertrains. China's rapidly expanding electric vehicle and hybrid markets have fostered a favorable environment for the growth of hybrid technologies and have emerged as a dominant force in the region.
Japan and South Korea are also significant players in the hybrid powertrain market. These two nations have reputations for technology leadership in automotive production and have been among the first to adopt hybrid technology. Japan, in particular, has been a leader in hybrid car manufacturing, with hybrid models going mainstream in the country. South Korea, on the other hand, is experiencing an uptick in demand for eco-friendly vehicles as fuel prices continue to rise and consumers become more environmentally conscious. With these nations still prioritizing sustainability and low carbon emissions, the Asian-Pacific region's hybrid car market is projected to experience sustained growth.
Recent Developments
In 2024, Toyota, Subaru, and Mazda unveiled joint plans to create new engines tuned for hybrid cars to improve performance and efficiency in the age of electrification. The engines will be smaller in size, which will enable better vehicle design and aerodynamics, and will be adaptable to carbon-neutral fuels like e-fuel, biofuels, and liquid hydrogen. The move shows the automakers' determination to offer various alternatives to reach carbon neutrality and develop sustainable automotive technology.
In 2024, Porsche revealed plans to build new gas and hybrid cars in addition to its lineup of electric cars, hoping to provide a wide variety of powertrains to satisfy different consumer tastes and market needs. Porsche's decision is indicative of the company's dedication to offering a variety of gas, hybrid, and electric vehicles that appeal to different customers and allow it to cope with an ever-changing auto industry.
In 2024, Maruti Suzuki had plans to launch a hybrid variant of the Fronx in 2025 with an in-house designed series hybrid powertrain. The system uses a petrol engine as a generator to generate electricity, which is used to drive an electric motor powering the wheels. This strategy is said to provide better fuel efficiency, with reports indicating a fuel mileage of more than 35 km/l, without increasing production costs relative to conventional hybrid systems. The Fronx hybrid is likely to launch together with new models such as the Baleno and Swift as part of Maruti Suzuki's efforts to increase its lineup of fuel-efficient vehicles. In 2024, Hyundai Motor India has announced introducing hybrid cars into the Indian market shortly.
This follows the increasing trend of hybrids, as consumers' demand for frugal, environmentally friendly car choices rises. Hyundai is looking to cater to varied customer needs, providing various powertrain technologies such as petrol, diesel, electric, and hybrid. This growth is complemented by Hyundai's emphasis on raising production capacity and its EV lineup, with flagship models such as the electric Creta in 2025.
Key Market Players
Honda Motor Co., Ltd.
Ford Motor Company
Hyundai Motor Company
Kia Corporation
General Motors Company
BMW AG
Volkswagen AG
AB Volvo
Suzuki Motor Corporation
Years considered for this report
Historical Period2014-2017
Base Year2018
Estimated Year2019
Forecast Period2020-2024
Objective of the Study
- To assess the demand-supply scenario of hybrid powertrain, which covers production, demand and supply of hybrid powertrain, globally.
- To analyze and forecast global hybrid powertrain market size.
- To classify and forecast global hybrid powertrain market based on vehicle type, components and regional distribution.
- To identify drivers and challenges for global hybrid powertrain market.
- To examine competitive developments such as expansions, new product launches, mergers & acquisitions, etc., in global hybrid powertrain.
- To conduct the pricing analysis for hybrid powertrain.
- To identify and analyze the profile of leading players involved in the manufacturing of hybrid powertrain.
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