Hybrid vehicles offer the advantages of both conventional internal combustion engines and electric powertrains. They have lower emissions and better fuel efficiency compared to conventional vehicles. The growing concerns regarding environmental pollution and stringent emission norms are increasing the demand for eco-friendly hybrid vehicles.
Market key trends:
The hybrid vehicles market is witnessing high growth owing to technology advancement in battery capacity and efficiency. Automakers are investing heavily in R&D to develop advanced lithium-ion batteries with higher energy density. For instance, Toyota has developed its compact and lightweight nickel-metal hydride battery that offers improved performance. Further, the reducing battery prices are making hybrid vehicles more affordable. The availability of government incentives and tax rebates on the purchase of hybrids in several countries is another factor driving their adoption rate globally.
Threat of new entrants: The threat is relatively low due to high capital requirements for research and development, manufacturing facilities, and established brand loyalty. However, threat may rise with increasing focus of new players on hybrid technologies.
Bargaining power of buyers: Bargaining power of buyers is moderate as hybrid vehicles market offer differentiated products and there are no close substitutes. However, presence of large automobile companies increases buyer bargaining power.
Bargaining power of suppliers: Suppliers have moderate bargaining power due to dependence of OEMs on suppliers of key components like electric motors, batteries and electronic control units. Established suppliers can influence price and product differentiation.
Threat of new substitutes: Threat is moderate from new battery technologies that improve vehicle range and charging times. Also, pure electric vehicles are becoming a stronger substitute.
Competitive rivalry: Intense due to presence of global automotive giants and new local players focusing on green technologies.
Strength: Growing environmental concerns and stringent emission norms are driving demand for greener vehicles. Hybrid powertrains improve fuel efficiency compared to conventional vehicles.
Weakness: High initial costs of hybrids act as a deterrent for many buyers. Limited charging infrastructure hinders widespread adoption of plug-in hybrids.
Opportunity: Favorable government policies in the form of subsidies and tax rebates are promoting hybrid vehicle sales. Growing consumer preference for electric vehicles opens up opportunities.
Threats: Volatility in crude oil and raw material prices increases vehicle costs. Entry of tech giants may disrupt existing business models in the automotive industry.
The Global Hybrid Vehicles Market Demand is expected to witness high growth, exhibiting CAGR of 18% over the forecast period, due to increasing stringency of fuel economy and emission regulations worldwide. By 2030, hybrid powertrains are projected to account for over 25% of new passenger vehicle sales globally.
Regionally, Asia Pacific dominates the hybrid vehicles market currently and is likely to maintain its lead, growing at a CAGR of over 20% till 2030. China and Japan are major production and sales hubs for hybrids, facilitated by strong government support and consumer acceptance of green vehicles.
Key players operating in the Hybrid Vehicles market are Toyota Motor Corporation, Nissan Motor Co. Ltd., Honda Motor Company Ltd., Hyundai Motor Company, Kia Motors Corporation, Daimler AG, Volvo Group, Volkswagen Group, BMW AG, Ford Motor Company, Mitsubishi Motors Corporation, and BYD Co. Ltd. Strategic partnerships and new product launches focusing on hybrid powertrains are some of the key strategies adopted by these companies to strengthen their market positions.
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it