The Total Addressable Market (TAM) for mild hybrid was valued at USD 85.49 billion in 2022. It is projected to reach USD 353.94 billion by 2031, growing at a CAGR of 17.1% during the forecast period (2023-2031).
Mild hybrid vehicles have a relatively high price-performance ratio compared to full hybrid and electric cars because they were developed as a transitional technology between internal combustion engines and electric vehicles. Mild hybrid car sales have been increasing despite some governments ceasing to offer incentives for these vehicles. The fastest growth is anticipated in the Asia-Pacific area, with Europe and North America following. The automobile sector is oriented toward innovation, technology, and the creation of cutting-edge electric vehicles in nations like China, India, Japan, and South Korea.
Favorable Government Policies and Incentives
Hybrid vehicles are considered a compromise between battery-electric vehicles, Internal Combustion Engines (ICE), and automobiles (BEV). Governments of several nations across the world have put in place a variety of regulations and incentives to speed up the use of hybrid vehicles in the direction of a complete transition to electric cars as part of their aim for net-zero carbon emission in a predetermined timeline. For instance, by April 2022, India intends to introduce stringent pollution restrictions (Euro 7) modeled after those in Europe. According to this legislation, automakers must reduce emissions by 113 grams, or about 13%, every kilometer.
Internal Combustion Engine Policies of the Government
Governments in several major auto markets have established strict emission standards and long-term strategies to phase out Internal Combustion Engines (ICEs). The requirement for a hybrid system virtually disappears when ICE is phased out, which causes a decline in demand for hybrid cars. Some of the most prominent car markets in the world have made public their goals and plans to phase out internal combustion engines over an extended period of time. For example, the UK announced updated phase-out dates for ICE passenger cars and vans in mid-November 2020, shifting the initial 2040 aim to specific goals for 2035 and 2030, respectively.
Hybrid Vehicle Innovations from OEMs and A Growing Inclination
Several OEMs have been innovating and releasing new hybrid vehicles to maintain their position in the market due to a significant increase in demand for hybrid cars worldwide. For instance, Guangzhou Automobile Group Co., Ltd. introduced several new models in cooperation with Honda in December 2021. The Breeze plug-in hybrid is one of the models. The company also introduced six new models, including the Highlander Hybrid of the fourth generation. The new Cadillac XT4, with a 48V mild hybrid powertrain system, is outfitted with a 48V motor, battery, power management units, and hybrid control unit and was also introduced by SAIC-GM in December 2021.
The global mild hybrid market is segmented by capacity type and vehicle type.
Based on capacity type, the global mild hybrid market is bifurcated into less than 48V and 48V and above.
The 48V and above segment is estimated to grow at a CAGR of 18.10% and is the highest contributor to the market during the forecast period. The necessity for electricity to provide electronic components like compressors, heaters, power steering, and electric pumps has increased, leading to the introduction of 48V batteries. Over the past three years, many automakers have offered 48V mild hybrids as standard equipment in their new vehicle models (2016-2018). For instance, the new XT4 compact crossover SUV was introduced in December 2021 by the Cadillac division of General Motors Corporation Limited (SAIC-GM). The new XT4 features enhanced configuration and power. It has a 48V mild-hybrid powertrain consisting of a 48V motor, 48V power battery, power management module, hybrid control unit, and a 2.0L variable-cylinder turbocharged engine with a maximum power output of 174kW and a peak torque of 350Nm.
In many nations worldwide, demand for mild hybrid vehicles outfitted with less than 48V capacity is steadily rising. The market for vehicles with a soft hybrid system of less than 48V power is growing as a result of the launch of these vehicles by automakers in various nations across the world. The new petrol engine from the European automaker Renault was introduced in October 2021. The 12V mild-hybrid technology in the 1.3-liter turbocharged petrol engine makes it a cutting-edge piece of machinery. These engines may soon be available in vehicles like the Nissan Kicks and the Renault Duster.
The global mild hybrid market is bifurcated based on vehicle type into passenger cars and commercial vehicles.
The passenger car segment is the highest contributor to the market and is estimated to grow at a CAGR of 18.70% during the forecast period. Mild hybrid passenger automobiles are becoming more and more popular. Due to a rise in new product introductions by numerous automakers over the past few years, mild-hybrid technology has seen growth. For example, Hyundai, a well-known automaker, introduced the Bayon, a brand-new crossover SUV, on March 3, 2021. The vehicle was designed specifically for the European continent. The car has a 48-volt mild hybrid system combined with a 1.0-liter engine. Mercedes-Benz introduced the New Maybach S-Class in November 2020. A 4.0-liter twin-turbo with EQ-Boost mild hybrid technology powers the vehicle. The vehicle, which will replace the current Maybach 560 and 650 in the line-up, is anticipated to debut in India in 2022.
Pickup trucks and vans are light commercial vehicles that commonly use mild hybrid technology. The leading OEMs, like RAM, Daimler, and others, are producing and releasing new products with new technology as the demand for light commercial vehicles rises globally. The 1500 DT pickup truck from an American commercial vehicle will go on sale in Australia in May 2021. A 5.7-liter gasoline V8 engine with a moderate hybrid system power the light truck. There is a 48-volt battery pack in the system. The new mild-hybrid bus from the Polish bus manufacturer Solaris was introduced in September 2020. The corporation developed the bus to offer cutting-edge urban transportation services while lessening its adverse environmental effects.
The global mild hybrid market is bifurcated into four regions: North America, Europe, Asia-Pacific, and LAMEA.
Europe Dominates the Global Market
Europe is the most significant revenue contributor and is expected to grow at a CAGR of 17.80% during the forecast period. One of the critical vehicle markets in Europe is Germany. Some of the major automakers in the world, including BMW, Daimler, and Volkswagen, are based there. Germany has seen a considerable rise in the demand for mild hybrid vehicles over the past few years due to several factors, including the preference for low or zero-emissions cars. Another element driving up demand for low-emission vehicles like mild hybrid cars is the government's strict emission regulating rules. The market for mild hybrid automobiles in Germany is also increasing due to new product introductions by various automakers.
North America is expected to grow at a CAGR of 15.75% during the forecast period. In the US, strict environmental regulations and government incentives push automakers to install a mild hybrid that might supplement the current gasoline/diesel engine. In contrast, mild hybrid vehicles cannot independently power the motors to complete hybrid vehicles. The more significant growth would hamper the potential rise of mild hybrid vehicles in pure electric or completely hybrid automobiles in the United States. However, this substitute system provides a step toward an EV future. For instance, Gentle hybrid technology first appeared in American markets in 2001. The first vehicle with dual voltage (42V/14V) in commercial production was the Toyota Mild Hybrid System (THS-M).
Asia-Pacific is expected to grow significantly over the forecast period. The market for mild hybrid electric vehicles has increased significantly in China and is anticipated to stay high during the projected period. With little expense, the 48V mild-hybrid system can cut fuel consumption to some amount. Due to costs and carbon emissions, automakers are eager to put the 48V mild hybrid system on conventional fuel vehicles. In addition, consumers may wait to see the fuel savings achieved by the 48V system.
One of the biggest automotive marketplaces in the world is the Brazilian market. It serves as a significant operational hub for Ford Motor Co., Volkswagen AG, General Motors Co., Toyota Motor Corporation, and Fiat Chrysler Automobiles NV. Vehicle ownership has significantly increased, which has allowed manufacturers to make considerable investments in the area. The United Arab Emirates, Israel, Egypt, Saudi Arabia, Morocco, and Iran are a few nations with a market for hybrid cars.
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