Hybrid market to peak in seven years

The hybrid electric vehicle (HEV) market could peak at US$792 billion in 2027 after significant sales growth in recent years, including 2020 – in spite of the implications of COVID-19 on the global automotive industry.

These HEVs, sometimes dubbed “self-charging hybrids” (hybrids which do not plug in but have electric-only driving modes), provide for the consumer who wants reduced fuel consumption and CO2 emissions but isn’t completely convinced by the proposition of plug-in vehicles, says IDTechEx in its latest report Full Hybrid Electric Vehicle Markets 2021-2041.

This could be due to the increased cost of battery electric vehicles (BEVs) and plug-in hybrids (PHEVs) or the potential lack of charging capabilities at their residence. Either way, the HEV presents a good opportunity in the short term for these consumers, the report says.

While the European car market is expected to see a significant drop in sales for 2020 due to COVID-19 related shutdowns, the HEV market is expected to continue its strong growth.

A breakdown of the HEV market in Japan, Europe, the US, China, and South Korea for cars, buses, trucks, and light commercial vehicles (LCVs) is provided, along with their battery and motor-generator technologies with forecasts for the next 20 years.

HEVs can also aid manufacturers – with CO2 emissions targets becoming stricter worldwide, sales of HEVs can serve to lower the overall CO2 output of a manufacturers’ fleet and help to avoid the related fines, IDTechEx explains.

“In fact, in Europe, the report finds several automotive manufacturers are not going to meet the emissions targets and will have to either purchase credits from other manufacturers or face large fines.”

The report says CO2 reduction benefits of HEVs are nowhere near that of BEV and PHEV drivetrains, but the technology is more mature, making it a potential stop-gap to meet these targets in the short-term.

Japan has historically been the strongest market for HEVs, with the likes of Toyota, Honda, and Nissan all playing significant roles.

However, it is expected that Europe will overtake Japan this year, even if the majority of HEV sales still come from Japanese manufacturers.

While it appears that Europe will remain the largest HEV market for some time, it is an inherently limited one, the report states.

Several European countries have set out plans or regulations to ban the sales of new ICE vehicles in the 2030s, although some haven’t yet made their stance clear on HEVs and PHEVs.

Among those that have, the UK is aiming to have no vehicles with combustion engines of any form being sold from 2035. Given that the EU is such a strong market for HEVs, this could drive the trend worldwide, IDTechEx predicts.

“HEVs do not only have to contend with impending regulations but also with competition from other drivetrain technologies.”

One threat comes from the rise of 48V hybrid technology, for which some are promising 80% of HEV performance for 30% of the powertrain cost – see 48V Full Hybrid, 48V Mild Hybrid, 48V BEV Cars: Markets, Technology Roadmap 2021-2041.

All three could potentially be limited by future fossil fuel bans, but PHEVs are certainly looked upon more favourably, and the 48V mild hybrids present an easier integration challenge to improve CO2 emissions and fuel economy quickly, says IDTechEx.

It has created a comprehensive HEV car model database of more than 80 HEV models sold between 2015-2019 to determine trends in historic sales, battery capacity, motor-generator power and number, market share, and market value.