Mild hybrid vehicles use a small electric motor to assist the internal combustion engine. They help restart the engine automatically during idle stops and improve acceleration performance. The mild hybrid system improves the fuel efficiency and reduces emission levels without compromising on drivability. The growing environmental concerns and stringent emission norms around the world have compelled automakers to develop more fuel-efficient vehicle options.
The global Mild Hybrid Vehicle Market is estimated to be valued at US$ 115.17 Mn in 2023 and is expected to exhibit a CAGR of 7.3% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity:
Increasing Fuel Efficiency
The opportunity to increase fuel efficiency through the adoption of mild hybrid technology is expected to drive the market growth over the forecast period. Mild hybrid systems help improve fuel efficiency by 10-15% through regenerative braking, battery power assistance during acceleration, and stop-start function. With fuel prices on the rise globally and consumers becoming more environment conscious, automakers are increasingly adopting mild hybrid systems. The improved fuel efficiency lowers the cost of ownership for customers and helps automakers comply with the stringent Corporate Average Fuel Economy (CAFE) standards. This growing demand for fuel-efficient vehicles will support the increased sales of mild hybrid vehicles during the forecast period.
Porter's Analysis
Threat of new entrants: The mild hybrid vehicle market faces moderate threat of new entrants due to the high capital requirement for research and development. However, with increasing demand for fuel-efficient vehicles, the market offers growth opportunities.
Bargaining power of buyers: Buyers have moderate bargaining power due to the availability of alternate fuel-efficient vehicle options. However, buyers opt for mild hybrid vehicles due to their affordability and reduced emissions.
Bargaining power of suppliers: Component suppliers have low-to-moderate bargaining power as automotive giants have large supplier base and in-house production of key components.
Threat of new substitutes: The threat from new substitutes like hybrid, plug-in hybrid and electric vehicles is moderate as they require extensive infrastructure and offer limited mileage per charge compared to mild hybrids.
Competitive rivalry: High among established automotive manufacturers.
SWOT Analysis
Strength: Improved fuel efficiency and emissions compared to conventional vehicles. Lower costs than other hybrid technologies.
Weakness: Offer limited improvements in fuel economy versus other hybrids. Drivetrains add complexity and costs.
Opportunity: Growing global demand and stringent emission norms drive sales opportunities. Potential for improved technologies.
Threats: Rising raw material costs affect affordability. Dependence on conventional ICE technologies.
Key Takeaways
The Global Mild Hybrid Vehicle Market Demand is expected to witness high growth over the forecast period of 2024-2031 driven by stringent emission regulations and rising environmental concerns. The global Mild Hybrid Vehicle Market is estimated to be valued at US$ 115.17 Mn in 2024 and is expected to exhibit a CAGR of 7.3% over the forecast period 2024 to 2031.
Asia Pacific currently dominates the market attributed to the large consumer base in countries like China and India. Regional governments offer subsidies for eco-friendly vehicles further fueling demand.
Key players operating in the mild hybrid vehicle market include Toyota Motor Corporation, Nissan Motor Co. Ltd, Honda Motor Company Ltd, Hyundai Motor Company, Kia Motors Corporation, Suzuki Motor Corporation, Daimler AG, Volvo Group, Volkswagen Group, BMW AG, Ford Motor Company, Audi AG, Jaguar Land Rover Ltd, and Chevrolet. Automakers are focusing on introducing multiple mild hybrid models and capabilities to strengthen their market position. Partnerships across supply chain are helping to improve technologies and reduce costs.
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