Hybrid Electric Car Market Will Reach 9.9 Million Units by 2030

With an increase in population and the income of the people, the number of vehicles on the roads globally are also increasing like anything. Vehicular pollution has long been a global issue, and it is continuing to be the same. Addressing that, people have started looking for options that can substitute the burning of fossil fuels in vehicles. 

Electric cars and hybrid electric cars have come out as a solution for countering this issue of increasing pollution. Because of this, the demand for hybrid electric cars is on the rise, and will reach a volume of 9.9 million units by the end of this decade.

What is a Hybrid Electric Car?

HEVs has all the benefits of a gasoline along with electric powertrain. They are designed with an intention to chiefly meet the goal of getting better fuel economy from a vehicle. Mileage of a hybrid cars is much better than a conventional fuel burning car.

While conventional cars use an ICE-powered engine, the hybrid cars have engine and motor. The motor functions in sync with the petrol- or diesel-powered engine. 

Different Types of Hybrid Cars

Pure Hybrids

Pure hybrids have all the potential to just run on the power from an electric motor, also there is a feature in these cars of switching automatically between fuel power and electric power depending up on the terrain and the usage. These variants had the largest share in the hybrid electric car market, of around 66%, last year as stated by P&S Intelligence..

Mild Hybrids

Mild-hybrid is another kind of car that has the potential to do the same. The motor in a mild-hybrid car provides support the engine in acceleration hence bringing about a better fuel economy than the conventional fuel-powered cars.

Plug-in Hybrids

PHEVs are pretty much similar to EVs. They can run solely on electric motors, though, the range of the plug-in hybrids is much greater. While Hybrid cars give a mileage of 25–40 km in electric mode, PHEVs can have a range of around 60–100 km in pure electric mode. Similarly, they can switch from electric to hybrid mode.

People are choosing hybrid cars based on their preferences and pocket, and with the improvements in technology and charging infra, there can be a time, when the roads will be bereft of only diesel-petrol driven vehicles. 

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Hybrid Electric Car Puts Tech On Track

The strict government regulations on the emission of carbon dioxide (CO₂) from vehicles and the fall in battery prices are some of the reasons behind the growth of the hybrid electric car market. In 2017, the market generated a revenue of $57,164.8 million, and it is expected to attain a size of $1,38,023.3 million by 2023, progressing at a 16.7% CAGR during the forecast period (2018–2023). Hybrid electric cars use an internal combustion engine (ICE) with a battery, which is charged by converting the kinetic energy produced during braking into electric energy.

On the basis of hybridization, the hybrid electric car market is bifurcated into full and mild. Of these, in 2017 the full bifurcation held a larger revenue share of more than 85.0% in the market, and it is predicted to dominate it during the 2018–2023 period as well. However, mild hybrid cars are predicted to grow faster in the market during the forecast period, especially in developing nations, such as India and China. This growth can be due to the low cost of mild hybrid cars compared to full hybrid variants.

Further the mechanical integration of components and powertrains and properties, such as electric turbocharger, power steering, and air conditioning, at a low cost is easier in mild hybrid cars. A full hybrid car is nearly $2,500–$3,500 costlier than a similar conventional car. Even though a full hybrid car is more fuel-efficient than the mild one, the latter provides a better cost-to-benefit ratio due to its comparatively low upfront cost. Furthermore, the cost-efficient aspect for customers and the time-saving aspect for producers are boosting the growth of the hybrid electric car market.

Furthermore, several initiatives are being taken by the European Commission to ensure a cleaner and greener environment. For instance, it targets to lower CO₂ emissions by 20.0% by 2020 from the levels registered in 2008. Similarly, various nations have proposed motor vehicle carbon emission or fuel efficiency policies. The increasing concern in the light of CO₂ emissions around the globe is wiping out conventional vehicles. These strict emission policies would ultimately raise the price of traditional cars and impel customers and automobile organizations to adopt low-emission hybrid electric vehicles (HEVs).

Geographically, the Asia-Pacific region led the hybrid electric car market in the historical period (2013–2017), wherein it made a revenue contribution of more than 57.0%, and it is expected to maintain its lead in the market till 2021. This is attributed to the rising government incentives, increasing environmental awareness among customers, and strict emission policies in various countries, including Japan, which is a hub for giant hybrid electric vehicle makers, such as Honda, Toyota, Nissan, and Mitsubishi.

Various nations are offering support, such as high-occupancy vehicle lane and emission inspection exemption, to owners of hybrid cars. Further, the electric car battery cost reduced from $1000/kWh to $227/kWh during 2010–2016. During the forecast period, the prices of lithium ion (Li-ion) batteries are predicted to witness a greater fall compared to nickel-metal hydride (NiMH) batteries. As per industry experts, the cost of Li-ion batteries is expected to drop below $120/kWh by 2020, which, in turn, would boost the hybrid electric car market as the price of battery often decides the electric car cost.

Thus, stringent government regulations and a drop in the battery prices are predicted to augment the market growth during 2018–2023.

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