The global Mild Hybrid Vehicles market generated USD 101.04 Billion revenue in 2023 and is projected to grow at a CAGR of 17.36% from 2024 to 2033. The market is expected to reach USD 500.83 billion by 2033. Stringent emission regulations, a focus on fuel efficiency, and government incentives are significant drivers prompting automakers and consumers to transition from conventional vehicles to hybrid ones. Additionally, the expanding market in developing countries presents promising growth prospects for industry participants.

Market Introduction:

Mild hybrid vehicles (MHVs) are hybrid vehicles that incorporate a small electric motor and a battery system to support the traditional internal combustion engine. Mild hybrid vehicles cannot solely rely on electric power for propulsion. Instead, the electric motor helps the engine during deceleration, acceleration, and low-speed driving, enhancing fuel efficiency and reducing emissions. The electric motor primarily functions as a generator and starter in mild hybrid systems. It helps to recover energy during braking, which is stored in the battery for later use. This stored energy can provide additional power during acceleration or run auxiliary systems, such as power steering and air conditioning, thereby lessening the engine's load and boosting the overall efficiency. Mild hybrid vehicles often feature start-stop technology, which powers off the engine when the vehicle comes to a stop and then resumes/restarts the engine quickly when the driver releases the brake pedal. This feature helps to conserve fuel, especially in city driving conditions where frequent stops occur. Overall, mild hybrid vehicles offer a more fuel-efficient and climate-friendly alternative to conventional internal combustion engines (ICEs) while maintaining the convenience and range consumers expect. They represent a transitional step towards more electrified drivetrains, providing efficiency and emissions reduction benefits without the need for plug-in charging infrastructure.

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Recent Development

• In November 2023: Jeep has broadened its Avenger SUV range by unveiling the Avenger e-Hybrid, a model powered by a mild-hybrid powertrain system. This innovative addition incorporates a 48V setup and a 21 kW electric motor seamlessly integrated into the SUV's gearbox. This configuration allows electric-only driving at low speeds, enabling travel up to 1 km without emissions.
• In May 2023: Toyota SA has declared plans to introduce mild-hybrid powertrain systems for the Fortuner and Hilux models. These popular SUVs are expected to utilize the automaker's TNGA platform and may extend their reach to the Indian market, potentially marking their global debut in 2024.
• In September 2022: Volvo has introduced its newest series of petrol mild-hybrid vehicles in India. The 2023 lineup comprises the petrol mild-hybrid variants of its flagship SUV, the XC90, the compact SUV XC40, the mid-size SUV XC60, and the luxury sedan S90.

Market Dynamics:

Drivers

Regulatory Pressures and Emission Standards - Stringent emissions regulations imposed by governments worldwide push automakers to develop vehicles with lower emissions. Mild hybrid vehicles, which offer improved fuel efficiency and lowered emissions compared to conventional internal combustion engine vehicles, are seen as a viable solution to meet these standards.

Fuel Efficiency and Cost Savings - Mild hybrid vehicles operate an electric motor and an ICE (internal combustion engine) to enhance fuel efficiency. This factor appeals to consumers looking to save on fuel costs over the long term, especially with rising fuel prices. Additionally, some nations offer incentives such as tax breaks or subsidies for purchasing hybrid vehicles, further enhancing their cost-effectiveness.

Advancements in Battery Technology - The evolution of advanced battery technologies, such as Li-ion batteries, has significantly enhanced the performance and efficiency of mild hybrid vehicles. These batteries are lighter, more compact, and offer higher energy density, allowing for better integration into vehicle designs without sacrificing interior space or performance.

Restraints:

High Initial Cost - Mild hybrid vehicles typically incur higher upfront costs than conventional internal combustion engines. This initial cost barrier may deter price-sensitive consumers from purchasing mild hybrid models despite potential long-term fuel savings.

Competition from Alternative Powertrains - The automotive market offers various alternative powertrain options, including plug-in hybrid, fully electric, and hydrogen fuel cell vehicles. Competition from these alternative technologies may divert attention and resources from mild hybrid vehicles, limiting their market share and growth potential.

Opportunities:

Diversification of Vehicle Offerings - Automakers increasingly diversify their vehicle offerings to include hybrid and electric options across different vehicle segments, including sedans, SUVs, and trucks. This diversification allows automakers to cater to broader consumer preferences and market segments, expanding the potential customer base for mild hybrid vehicles.

Government Incentives and Regulations - Many governments worldwide are implementing policies to promote the adoption of hybrid and electric vehicles through incentives such as subsidies, tax credits, and preferential treatment for low-emission vehicles. These incentives create a favourable market environment for mild hybrid vehicles and encourage consumers to consider them as viable options.

Challenges:

Consumer Perception and Education - Consumers still need more awareness and understanding of mild hybrid technology and its benefits. Confusion about how mild hybrids differ from other hybrid vehicles or misconceptions about their performance and efficiency may deter potential buyers.

Limited Electric-Only Range - Mild hybrid vehicles typically have a smaller electric motor and battery than plug-in hybrids or fully electric vehicles, resulting in a limited electric-only range. This limitation may deter consumers who prioritize electric-only driving capability or frequently travel longer distances, especially in regions with well-developed EV charging infrastructure.

Regional segmentation analysis:

The regions analyzed for the market include North America, Europe, South America, Asia Pacific, the Middle East, and Africa. Europe emerged as the most prominent global Mild Hybrid Vehicles market, with a 44.62% market revenue share in 2023.

Europe has some of the strictest emissions regulations in the world, particularly concerning CO2 emissions from vehicles. The European Union's fleet average CO2 emissions targets incentivize automakers to produce vehicles with lower emissions. Mild hybrid vehicles offer better fuel efficiency and lower emissions than conventional internal combustion engine (ICE) vehicles, helping automakers meet these stringent regulatory requirements. Furthermore, many European countries offer incentives and subsidies to boost the adoption of hybrid and electric vehicles. These incentives can include tax breaks, grants, reduced registration fees, and access to low-emission zones. Such incentives make mild hybrid vehicles more appealing to consumers by reducing their upfront and total ownership costs over time. Additionally, European consumers increasingly prioritize environmental sustainability and fuel efficiency when choosing vehicles. Mild hybrid vehicles align with these preferences by offering lower fuel consumption and reduced emissions than conventional vehicles. Additionally, European consumers tend to be early adopters of new automotive technologies, further driving demand for mild hybrid vehicles in the region. Besides, many European cities are experiencing high levels of urbanization and congestion, leading to concerns about air quality and environmental pollution. With their ability to operate efficiently in stop-and-go traffic conditions, mild hybrid vehicles are well-suited for urban commuting. The compact size and manoeuvrability of mild hybrid vehicles also make them attractive options for navigating crowded city streets.

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Capacity Segment Analysis

The capacity segment is divided into less than 48V and 48V and above. The 48V and above segment dominated the market, with a share of around 66.21% in 2023. 48V and above mild hybrid systems offer higher electrification levels than traditional 12V systems. This higher voltage enables more robust hybridization, allowing for features such as regenerative braking, electric boost during acceleration, and engine start-stop functionality. As vehicle electrification becomes more prevalent, automakers increasingly turn to 48V and above systems to meet consumer demand for improved fuel efficiency and reduced emissions. Most importantly, 48V and above mild hybrid systems provide greater energy recovery and utilization opportunities. The higher voltage allows for more efficient energy storage and distribution, improving overall system efficiency. This aspect translates to greater fuel savings and reduced emissions compared to 12V systems, making 48V and above mild hybrids more attractive to consumers and regulators seeking to address environmental concerns. Moreover, the additional power provided by 48V and above mild hybrid systems can enhance vehicle performance, particularly in acceleration and responsiveness. Electric boost capabilities allow immediate torque delivery, resulting in a more dynamic driving experience. Automakers are turning to higher voltage mild hybrid systems to meet these expectations as consumer preferences shift towards vehicles with improved performance and drivability.

Vehicle Type Segment Analysis

The vehicle type segment is classified into commercial vehicle and passenger car. The passenger car segment dominated the market, with a share of around 81.19% in 2023. Passenger cars represent the largest automotive market segment, with an expansive range of vehicle types and models catering to diverse consumer preferences. As consumers become increasingly concerned about fuel efficiency, emissions, and environmental sustainability, a growing demand for hybrid vehicles offers improved fuel economy and reduced environmental impact. Mild hybrid technology is an attractive compromise between conventional ICE (internal combustion engine) vehicles and fully electric or plug-in hybrid vehicles, making it appealing to consumers. In addition, government regulations and emissions standards, particularly in regions like Europe and parts of Asia, are driving automakers to develop vehicles with lower emissions and improved fuel efficiency. Mild hybrid vehicles help automakers meet these stringent regulatory requirements by lowering fuel consumption and greenhouse gas emissions than conventional internal combustion engine (ICE) vehicles. As a result, automakers prioritize developing and producing mild hybrid passenger cars to comply with regulatory mandates and avoid penalties. Besides, mild hybrid technology offers a cost-effective solution for better fuel efficiency and lowering emissions in passenger cars. Unlike fully electric or plug-in hybrid vehicles, which often command a higher upfront cost due to larger battery packs and more complex drivetrains, mild hybrid systems are relatively affordable to implement. This cost-effectiveness makes mild hybrid passenger cars accessible to a broader range of consumers, driving their widespread adoption in the market.

Some of the Key Market Players:

• Audi AG
• BMW AG
• BYD Co. Ltd.
• Daimler AG
• Ford Motor Company
• Groupe PSA
• General Motors Company
• GAC Group
• Honda Motor Company Ltd.
• Hyundai Motor Company
• Jeep
• Kia Motors Corporation
• Mitsubishi Motors Corporation
• Mercedes-Benz
• Nissan Motor Co. Ltd.
• Suzuki Motor Corporation
• Toyota Motor Corporation
• Volvo Group
• Volkswagen Group

Report Description: