Alternative Fuel and Hybrid Vehicle Market Expected to Reach $7,976.0 Billion by 2030

According to a new report published by Allied Market Research, titled, “Alternative Fuel and Hybrid Vehicle Market," The alternative fuel and hybrid vehicle market was valued at $352.0 billion in 2020, and is estimated to reach $7,976.0 billion by 2030, growing at a CAGR of 34.5% from 2021 to 2030.

Asia-Pacific is expected to dominate the alternative fuel and hybrid vehicle market owing to supportive government policies for adoption of alternative fuel and hybrid vehicles. Moreover, Asia-Pacific offers lucrative opportunities for developing low cost fuel efficient automobiles and alternate fuel public charging infrastructure.

In recent years, different countries have started to adopt electric vehicles across the globe to meet their emission standards. Global sale of electric car reached 3 million in 2020, with an increase of 40% from 2019. The global electric car stock reached 10 million in 2020, of which, battery electric vehicles accounted for two-thirds of the global electric car fleet. Europe experienced a significant increase in electric car registrations in 2020. The implementation of 2020 corporate average CO2 emissions standards in European Union, purchase subsidies, and  favourable cash-for-clunker schemes contributed significantly to higher EV sales in 2020 despite the pandemic.

On the basis of fuel type, the global alternative fuel and hybrid vehicle market is segregated into hybrid vehicles, plugin hybrid vehicles, battery electric vehicles, and others. Several automobile manufacturers are innovating and integrating advanced features in alternative fuel and hybrid vehicles to offer maximum driving range with minimal emissions. For instance, in 2022, Toyota developed a hydrogen fuel cell-based electric vehicle, named “MIRAI”, which covers about 1300 km on a single hydrogen fill.

The significant factors impacting the growth of the alternative fuel and hybrid vehicle industry include decrease in oil reserves across the globe, growth in prices of fossil fuels, increase in adoption of clean mobility solutions, stringent government norms for emission control, and growth in supportive government policies to promote adoption of alternative fuel vehicles. Moreover, low fuel economy & performance associated with alternative fuel vehicles, and lack of infrastructure to support alternative fuel vehicles are factors that hamper the market growth. Development of charging infrastructure, electrification of public fleet, and technological advancements are expected to offer growth opportunities during the forecast period.

COVID-19 Impact Analysis

The COVID-19 crisis created uncertainty in the market, massive slowing of supply chain, falling business confidence, and increasing panic among the customer segments. Governments of different regions announced total lockdown and temporarily shut down the industries, thereby adversely affecting the overall production and sales.

The impact of the COVID-19 pandemic resulted in supply-chain disruptions, causing halt in production of vehicles and low sales of passenger cars across the globe. Moreover, government-enforced lockdowns resulted in halt in production and decrease in demand for alternative vehicles during the COVID-19 period.

However, with the removal of lockdown restrictions, growth in sales of electric cars has been observed. For instance, sales for electric car was recorded 3 million in 2020 in comparison to 2019, stating growth of 40% from 2019. This rise in sales of electric vehicle is expected to contribute in the growth of the alternative fuel and hybrid vehicle market.

KEY FINDINGS OF THE STUDY

• By fuel type, the battery electric vehicles segment is anticipated to exhibit significant growth in the near future.
• By vehicle type, the heavy commercial vehicle segment is anticipated to exhibit significant growth in the near future.
• By vehicle class, the luxury vehicle segment is anticipated to exhibit significant growth in the near future.
• By region, Europe is anticipated to register the highest CAGR during the forecast period.

Key players operating in the global alternative fuel and hybrid vehicle industry comprises BMW Group, BYD Company Ltd., Ford Motor Company, Honda Motor Co., Ltd., Mercedes-Benz Group AG, Mitsubishi Motors Corporation, Nissan Motor Co., Ltd., Tesla, Inc., Toyota Motor Corporation, and Volkswagen AG.