Mild Hybrid Vehicles Market

Increasing stringency of emission norms is driving the market growth

Market CAGR for mild hybrid vehicles is driven by the rising stringency of emission norms. Governments of various countries are developing strict vehicular carbon emission restrictions, considering the extreme impacts of pollutants on the atmosphere and human health. For instance, in July 2019, the US Department of Transportation implemented a 5.50 USD penalty rate for auto manufacturers that fail to concede with the Corporate Average Fuel Economy (CAFÉ) standards. These regulations have compelled manufacturers to enhance funding for the development & production of Mild Hybrid Cars.

New product launches by various automobile manufacturers are boosting the demand for mild hybrid vehicles market revenue over the forecast period. For instance, In August 2021, German automobile producer Mercedes Benz replaced its C-Class with a new refined model. The vehicle is available in petrol and diesel engine variants, all equipped with 48V mild hybrid technology. The car is also one of Germany's best-selling models for over a decade.

Increasing prices of fossil fuels due to the depletion in stocks and global politics coupled with awareness among people regarding emissions from IC engines have boosted the sale of electric vehicles. The International Energy Agency stated in their Global EV Outlook 2020 that in 2019, more than 2.1 million sales of electric cars were recorded worldwide, with a 40% year-on-year growth.

The mild hybrid vehicle is a viable alternative to the traditional IC engine-powered vehicle, as it does not require significant modifications, which might result in high costs for OEMs and customers, and also provides considerable fuel savings and reduction in emission. Mild Hybrid Cars permit the engine to be turned off whenever the car is cruising, braking, or stopped, yet it restarts quickly. These vehicles employ regenerative braking to recharge the batteries. These benefits have prompted numerous OEMs to introduce Mild Hybrid Cars.

For instance, VW Golf, Audi A4, BMW 3 Series, Mercedes-Benz C-Class, Fiat 500, Volvo KC 60 and 90 Series, Kia Ceed, and Ford Kuga are a few mild hybrid vehicle models available. Thus, the rising popularity of electric vehicles and a wide variety of options are driving the Mild Hybrid Vehicles Market.

The Global Mild Hybrid Vehicles Market Industry is experiencing growth due to increasing environmental regulations aimed at reducing greenhouse gas emissions. Governments worldwide are implementing stricter emissions standards, which encourage manufacturers to adopt mild hybrid technologies. For instance, the European Union has set ambitious targets for CO2 emissions reductions, pushing automakers to innovate. As a result, the market is projected to reach 209.5 USD Billion in 2024, reflecting the industry's response to regulatory pressures. This trend indicates a shift towards more sustainable transportation solutions, with mild hybrids being a viable option for compliance with these regulations.

By region, the study provides market insights into North America, Europe, Asia-Pacific and the Rest of the World. The North American mild hybrid vehicles market will dominate this market due to government initiatives and strict emission standards. Moreover, the developments concerning electric vehicles and the benefits, such as affordability provided by the Mild Hybrid Cars, will boost the market growth in this region. Further, the US mild hybrid vehicles market held the largest market share, and the Canada mild hybrid vehicles market was the fastest growing market in the North American region.

Further, the major countries studied in the market report are The US, Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 2: Mild Hybrid Vehicles Market Share By Region 2022 (USD Billion)

Source: Secondary Research, Primary Research, Market Research Future Database and Analyst Review

Europe's mild hybrid vehicles market accounts for the second-largest market share owing to the high presence of OEMs and the stringent emission norms encouraging the adoption of electric vehicles. Further, the German mild hybrid vehicles market held the largest market share, and the UK mild hybrid vehicles market was the fastest-growing market in the European region.

The Asia-Pacific mild hybrid vehicles market is expected to grow at the fastest CAGR from 2023 to 2032. This is owing to having the highest vehicle sales, majorly in China. Many automotive companies have planned to invest in this region to cater to the strong demand for Mild Hybrid Cars. For instance, In October 2021, General Motors launched its Buick GL8 Classic with a 48V mild hybrid powertrain in China. Moreover, China’s mild hybrid vehicles market held the largest market share, and the Indian mild hybrid vehicles market was the fastest-growing market in the Asia-Pacific region.

Leading market players are investing heavily in research and development to expand their product lines, which will help the mild hybrid vehicles market grow even more. Market participants are also undertaking various strategic activities to expand their global footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, the mild hybrid vehicles industry must offer cost-effective items.

Manufacturing locally to minimize operational costs is one of the key business tactics manufacturers use in the global mild hybrid vehicles industry to benefit clients and increase the market sector. Major players in the mild hybrid vehicles market, including Toyota Motor Sales, USA, Inc., Ford Motor Company, AB Volvo, Continental AG, ZF Friedrichshafen AG, Hyundai Motor Company, and others, are attempting to increase market demand by investing in research and development operations.

Volvo Car AB is a subsidiary of Zhejiang Geely Holding Group Co., Ltd, a car manufacturing company. It manufactures various cars, including SUVs, wagons and sedans. Volvo Car markets its products under the Volvo brand. Its models include XC90, XC70, V70, V60, V60 Cross Country, S80, S60 and other related models. It provides fleet sales and concept cars. The company has product development, manufacturing, sales, technology and customer service operations in Sweden, Belgium, and China. It sells cars through a network of dealers worldwide.

In November 2021, Volvo Cars launched a mild hybrid version of its flagship XC90 SUV in India. This mild hybrid petrol engine on the new Volvo XC90 replaces the 2-liter diesel engine that was previously available. The new petrol mild hybrid XC90 is available in a sole B6 Inscription trim, and the four-cylinder turbo-petrol unit works in conjunction with a 48V integrated starter-generator motor.

Mercedes-Benz Group AG, formerly Daimler AG, is an automobile company. It develops, manufactures and distributes premium and luxury cars and vans. The organization also offers several services, such as financing, leasing, car subscription, car rental, fleet management, insurance brokerage, digital charging and payment services, and innovative mobility services. The company strives to develop efficient powertrains and go all-electric in an emissions-free, software-driven environment. It has production facilities in Europe, North and Latin America, Asia and Africa. The company sells its vehicles and provides services in almost every country on all continents.

In October 2021, Mercedes-Benz unveiled two models, GLE Coupé and GLE, as diesel mild hybrids. They are provided with the existing four-cylinder diesel engine OM 654 M, which has a second-generation integrated starter-generator (ISG) and provides 200 kW/272 hp. The ISG includes the 48V electrical system.