Automotive and Transportation

Hybrid Vehicle Market

Global Industry Analysis and Forecast 2024-2031

Pages : 120

Base Year : 2023

Released Year : May 2024

Format :Pdf Ppt Xls

Report ID:KR688

Author : Saket A.

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Base Year


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Forecast Year


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Historical Years


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Market Value (2023)

USD 226.52 Billion

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Forecasted Value (2031)

USD 750.99 Billion

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CAGR (2024 - 2031)


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Fastest Growing Region (2024 - 2031)

Asia Pacific

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Largest Region

Asia Pacific

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By Vehicle Type

Passenger Car, Commercial Vehicle

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By Degree of Hybridization

Mild, Full, Plug-in-Hybrid

Hybrid Vehicle Market Size

The Global Hybrid Vehicle Market size was valued at USD 226.52 billion in 2023 and is projected to reach USD 750.99 billion by 2031, growing at a CAGR of 16.19% from 2024 to 2031. The market is experiencing steady growth driven by increasing environmental consciousness among consumers and government regulations promoting cleaner transportation.

Consumers are increasingly preferring eco-friendly vehicles, reflecting a broader trend toward sustainability in their purchasing decisions. Technological advancements, such as improvements in battery technology and enhanced fuel efficiency, are making hybrid vehicles more appealing to a wider audience. Additionally, rising fuel prices and growing concerns over air pollution are driving demand for hybrid models, particularly in urban areas with stricter emissions regulations. Automakers are investing heavily in research and development to improve hybrid technology and expand their product offerings. The market is expected to grow further as hybrid vehicles increasingly become a preferred choice for environmentally-conscious consumers.

The hybrid vehicle market encompasses the production and sale of vehicles that combine traditional internal combustion engines and electric propulsion systems. These vehicles leverage technologies such as regenerative braking and battery storage to improve fuel efficiency and reduce emissions compared to conventional gasoline-powered vehicles. The market includes a range of hybrid vehicle types, including hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs), and mild hybrid electric vehicles (MHEVs). Key players in the market include automotive manufacturers, suppliers of hybrid technology components, and government entities implementing regulations and incentives to promote the adoption of hybrid vehicles.

Analyst’s Review 

Increasing environmental concerns, coupled with advancements in hybrid technology, are leading to shifting consumer preferences toward more fuel-efficient and eco-friendly transportation options. Government initiatives aimed at reducing carbon emissions and promoting clean energy further bolster market growth. With ongoing research and development efforts focused on enhancing battery efficiency and lowering production costs, hybrid vehicles are poised to become increasingly competitive with traditional gasoline-powered vehicles. As infrastructure support improves and consumer awareness rises, the hybrid vehicle market is projected to experience sustained expansion, capturing a larger share of the automotive market in the coming years.

Hybrid Vehicle Market Growth Factors

The hybrid vehicle market is poised to witness notable growth due to evolving regulatory landscapes and technological advancements. Stringent fuel economy regulations, set forth by the European Union, are compelling automakers to prioritize the development and promotion of fuel-efficient vehicles, making hybrids a favorable choice. Additionally, technological advancements in battery efficiency and range are addressing consumer concerns regarding range anxiety, particularly in plug-in hybrids (PHEVs), thereby enhancing the appeal of hybrids for longer commutes.

However, the market faces challenges stemming from the growth of electric vehicles (EVs) and the high upfront cost of hybrids compared to traditional internal combustion engine (ICE) vehicles. Moreover, the hybrids' high initial purchase price of hybrids poses a barrier for budget-conscious consumers, potentially limiting market penetration.

Hybrid Vehicle Market Trends

The hybrid vehicle market is witnessing several key trends that are shaping its evolution and dynamics. The shift toward plug-in hybrids (PHEVs) is driven by advancements in battery technology, offering consumers the flexibility of electric driving for short commutes and gasoline power for longer trips, thus increasing the appeal of hybrid vehicles to a broader audience. Additionally, the integration of advanced driver-assistance systems (ADAS) enhances safety and convenience, attracting tech-savvy consumers who seek modern features in their vehicles. Automakers are increasingly focusing on the use of lightweight materials and improving aerodynamics to further optimize fuel efficiency, especially in PHEVs, thereby extending their electric range and reducing emissions. Moreover, the integration of connectivity and telematics solutions enhances user experience by enabling remote monitoring, diagnostics, and entertainment features, reinforcing hybrids as attractive choices for modern drivers seeking both efficiency and connectivity in their vehicles. These trends collectively drive innovation and consumer adoption in the hybrid vehicle market, positioning it for continued growth and competitiveness in the automotive industry.

Segmentation Analysis

The global hybrid vehicle market is segmented based on vehicle type, degree of hybridization, and geography.

By Vehicle Type

Based on vehicle type, the market is bifurcated into passenger cars and commercial vehicles. The passenger car segment garnered the highest revenue of USD 197.44 billion in 2023. Increasing consumer demand for fuel-efficient and environmentally friendly transportation options is mainly propelling the growth of the segment. Factors such as government incentives, stringent emission regulations, and growing environmental awareness among consumers are driving the adoption of hybrid passenger cars. Additionally, advancements in hybrid technology, which lead to improved performance and affordability, are fueling the expansion of the segment. Enhanced driving experience, lower operating costs, and reduced carbon footprint are major trends contributing to segment expansion. Moreover, manufacturers' focus on expanding their hybrid vehicle portfolios and offering a diverse range of passenger car models with hybrid options is projected to support the growth of the segment over the forecast period.

By Degree of Hybridization

Based on degree of hybridization, the market is categorized into mild, full, and plug-in. The full hybrid segment captured the largest market share of 54.73% in 2023. The technological advantage of full hybrid vehicles, enabling a seamless transition between internal combustion engines and electric power, is significantly contributing to the increasing demand for full hybrid vehicles. Moreover, increasing investments in hybrid technology by automotive manufacturers and rising consumer preference for vehicles that offer superior fuel efficiency without compromising performance are anticipated to support the growth in the forthcoming years. Additionally, the rise in government subsidies and tax incentives for hybrid vehicles is fostering the global adoption of full hybrid vehicles. Furthermore, advancements in battery technology, which enable longer electric-only driving ranges, are contributing to the expansion of the segment. Enhanced energy recovery systems and regenerative braking mechanisms further augment the efficiency of full hybrid vehicles, solidifying their position as the preferred choice among consumers seeking environmentally sustainable transportation options.

Hybrid Vehicle Market Regional Analysis

Based on region, the global hybrid vehicle market is classified into North America, Europe, Asia-Pacific, MEA, and Latin America.

Hybrid Vehicle Market Size & Share, By Region, 2024-2031

Asia-Pacific generated the highest revenue of USD 90.98 billion in 2023. The region witnessed a remarkable 32% growth in hybrid vehicle production between 2022 and 2023. This growth trajectory is mainly fueled by the presence of key manufacturers in major countries such as China, Japan, and India. China accounted for approximately 50% of the global hybrid vehicle production in 2023. Furthermore, a significant factor supporting the adoption of hybrid vehicles is the stringent government emission regulations prevalent in the region, particularly in China. These regulations incentivize the adoption of hybrid vehicles as a means to mitigate environmental impact. Moreover, government subsidies and tax breaks tailored specifically for hybrid vehicles enhance their affordability, thus increasing consumer demand. The region's concentrated efforts toward developing a robust charging infrastructure network, particularly for plug-in hybrid electric vehicles (PHEVs), underscore a strategic focus on advancing hybrid technology and fostering sustainable transportation solutions.

North America is poised to witness a substantial CAGR of 16.37% over 2024-2031. The region has demonstrated steady growth in recent years. However, the production of hybrid vehicles surged by 18% between 2022 and 2023, reflecting a growing interest in hybrid technology within the region. High gasoline prices, particularly prevalent on the West Coast, are a significant factor contributing to the increasing adoption of hybrid vehicles in North America. Moreover, government initiatives at both federal and state levels, such as tax credits and incentives specifically tailored for hybrid vehicles, are stimulating consumer demand. Automakers are strategically targeting larger hybrid SUVs and trucks, in keeping with prevailing consumer preferences in the region. However, despite these growth factors, North America is projected to cede some market share to the Asia-Pacific region in the foreseeable future. This underscores the need for sustained innovation and market strategies to maintain competitiveness in the evolving hybrid vehicle landscape.

Competitive Landscape

The global hybrid vehicle market report will provide valuable insight with an emphasis on the fragmented nature of the industry. Prominent players are focusing on several key business strategies such as partnerships, mergers and acquisitions, product innovations, and joint ventures to expand their product portfolio and increase their market shares across different regions. Companies are undertaking effective strategic initiatives, including investments in R&D activities, the establishment of new manufacturing facilities, and supply chain optimization, to gain a competitive edge in the market.

List of Key Companies in Hybrid Vehicle Market

  • Mercedes-Benz AG
  • BMW AG
  • Honda Motor Co., Ltd.
  • AB Volvo
  • Stellantis NV
  • Volkswagen
  • Ford Motor Company
  • Hyundai Motor Company
  • Kia Corporation

Key Industry Developments 

  • March 2024 (Acquisition): Toyota Motor Corporation entered into an agreement with Panasonic Holdings Corporation to acquire full ownership of Primearth EV Energy Co., Ltd. This strategic move aims to bolster Toyota's capacity for mass-producing automotive batteries.

The Global Hybrid Vehicle Market is Segmented as:

By Vehicle Type

  • Passenger Car
  • Commercial Vehicle

By Degree of Hybridization

  • Mild
  • Full
  • Plug-in-Hybrid

By Region

  • North America
    • U.S.
    • Canada
    • Mexico
  • Europe
    • France
    • U.K.
    • Spain
    • Germany
    • Italy
    • Russia
    • Rest of Europe
  • Asia-Pacific
    • China
    • Japan
    • India
    • South Korea
    • Rest of Asia-Pacific
  • Middle East & Africa
    • GCC
    • North Africa
    • South Africa
    • Rest of Middle East & Africa
  • Latin America
    • Brazil
    • Argentina
    • Rest of Latin America
  • Check Icon Additional Company Profiles
  • Check Icon Additional Countries
  • Check Icon Cross Segment Analysis
  • Check Icon Regional Market Dynamics
  • Check Icon Country-Level Trend Analysis
  • Check Icon Competitive Landscape Customization
  • Check Icon Extended Forecast Years
  • Check Icon Historical Data Up to 5 Years
Frequently Asked Questions (FAQ's)
The global market is projected to reach USD 750.99 billion by 2031, growing at a CAGR of 16.19% from 2024 to 2031.
The global hybrid vehicle market was valued at USD 226.53 billion in 2023.
Increasing consumer trends toward low emission transportation along with developments in plug-in hybrid technologies is driving growth in the market.
Top manufacturers of hybrid vehicle market are Mercedes-Benz AG, BMW AG, Honda Motor Co., Ltd., AB Volvo, Stellantis NV, Volkswagen, Ford Motor Company, TOYOTA MOTOR CORPORATION, Hyundai Motor Company, Kia Corporation, and others.
Asia-Pacific is the fastest growing region with the CAGR of 16.82% in the forecasted period (2024-2031) with the market value forecasted to reach at USD 313.98 billion by 2031.
By vehicle type, passenger car will hold the maximum share in the hybrid vehicle market with the revenue value of USD 626.33 billion by 2031.
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