Global Hybrid Electric Vehicle Market Expected to Reach 104.4 Million Units by 2033 - IMARC Group

Global Hybrid Electric Vehicle Market Statistics, Outlook and Regional Analysis 2025-2033

The global hybrid electric vehicle market size reached at 12.9 Million Units in 2024, and it is expected to reach 104.4 Million Units by 2033, exhibiting a growth rate (CAGR) of 25.78% from 2025 to 2033.

The global hybrid electric vehicle (HEV) market is expanding internationally owing to the various environmental, economic, and technological factors. In line with this, there is an increased concern among governments and consumers on reducing greenhouse gas (GHG) emissions and addressing climate change, which is encouraging the adoption of HEVs as a cleaner substitute to traditional internal combustion engine vehicles. These emission standards are set by regulatory authorities that are encouraging automotive manufacturers to develop environment-friendly solutions and increase the production of hybrids. Furthermore, the rising fuel prices are encouraging consumers to seek cost-effective transportation options, and HEVs, that offer advantages of electric motors and conventional engines which are attracting attention for their superior fuel efficiency. According to the sources, in February 2024, U.S. HEV sales reached 105,803 units, marking a 59.5% increase compared to February 2023. This surge highlights the growing appeal of HEVs due to their superior fuel efficiency and ability to mitigate fuel costs during times of price volatility​. Further, urbanization and heightening traffic congestion are impelling the demand for vehicles, offering lower emissions and improved mileage in stop-and-go conditions, positioning HEVs as an ideal solution for urban commuters. At the same time, developments in battery technologies are enhancing energy efficiency, endurance, and the accessibility of these cars dismissing earlier concerns about the cost of these car models and their abilities.

The implementation of various government initiatives to promote the provision of economic incentives like tax credits, subsidies as well as privileges like excise to access restricted areas which is encouraging people to make use of HEVs. Consumers are increasingly recognizing the long-term cost savings associated with these vehicles and are prioritizing sustainability alongside economic benefits in their purchasing decisions. A continuous hike in demand for charging infrastructure and new features, such as regenerative brakes and plug-in hybrid capabilities, is making HEVs more convenient and comprehensive. In 2024, The U.S. is investing $5 billion through the National Electric Vehicle Infrastructure (NEVI) program to establish a nationwide network of EV chargers, benefiting both plug-in hybrids and full EVs. This includes a focus on high-traffic corridors to enhance accessibility​. Automotive manufacturers are investing heavily in research and development, introducing technologically advanced and competitively priced models to meet the hiking demand for environmentally friendly vehicles. Partnerships between governments and private enterprises are fostering the development of electric mobility solutions is strengthening the market growth. Additionally, the integration of smart technologies, such as artificial intelligence (AI) powered fuel optimization and connected vehicle systems, is bolstering consumer interest in HEVs and aligning with the broader trend toward intelligent transportation systems. These factors are collectively shaping a dynamic market environment and continuously accelerating the adoption of HEVs.

Global Hybrid Electric Vehicle Market Statistics, By Region

The market research report has also provided a comprehensive analysis of all the major regional markets, which include North America (the United States and Canada); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Europe (Germany, France, the United Kingdom, Italy, Spain, Russia, and others); Latin America (Brazil, Mexico, and others); and the Middle East and Africa.. According to the report, North America accounted for the largest market share due to stringent emissions regulations favoring hybrid vehicles.

North America Hybrid Electric Vehicle Market Trends:

The demand for HEV in North America is amplified by rising environmental awareness and efforts to reduce reliance on fossil fuels. In line with this, various policies like the U.S. Inflation Reduction Act provide significant financial incentives for cleaner vehicles, including up to $7,500 in tax credits for new clean vehicles and $4,000 for used ones. These measures are designed to encourage a transition from traditional internal combustion engines to hybrid and electric models, which aligns with sustainability goals. Improved battery technologies and advanced hybrid powertrains are improving performance and are extending driving ranges, which is boosting consumer interest. In line with this, the implementation of improved battery technologies and advanced hybrid powertrains are significantly enhancing vehicle performance and driving ranges in North America. Moreover, escalating fuel prices are making fuel-efficient HEVs appealing. Urbanization and regulatory measures are focusing on minimizing air pollution in major cities which are motivating the adoption of eco-friendly vehicle options, solidifying the prominence of HEVs in sustainable transportation solutions.

Asia-Pacific Hybrid Electric Vehicle Market Trends:

The Asia Pacific region is experiencing demand for HEV due to rapid urbanization, increasing disposable incomes, and consumer preferences for fuel-efficient vehicles. Governments are actively supporting the transition with incentives, while local manufacturers are launching cost-effective hybrid models tailored to regional markets. Growing concerns over urban air pollution are also accelerating the adoption in densely populated cities.

Europe Hybrid Electric Vehicle Market Trends:

In Europe, strict carbon emission regulations and ambitious climate goals are boosting the adoption of HEV’s. Consumer preferences for sustainable mobility solutions are supported by extensive charging infrastructure and government subsidies, propelling the market demand. The growing popularity of ecofriendly technology in corporate fleets and rental services is further enhancing the market for hybrids in the region.

Latin America Hybrid Electric Vehicle Market Trends:

HEV’s are gaining importance in Latin America as governments introduce incentives and tax breaks to promote green mobility. Heightening fuel prices and growing consumer interest in reducing long-term vehicle ownership costs are supporting the shift to hybrids. The increasing awareness of sustainable practices and urbanization trends in key countries like Brazil and Mexico are amplifying the demand.

Middle East and Africa Hybrid Electric Vehicle Market Trends:

The Middle East and Africa region is experiencing growth in HEV demand due to heightening environmental consciousness and the diversification of economies beyond fossil fuels. Governments are implementing policies to promote alternative energy solutions, while high fuel costs and urban expansion which are motivating the adoption of fuel-efficient hybrid vehicles in urban and semi-urban areas.

Top Companies Leading in the Hybrid Electric Vehicle Industry

Some of the leading hybrid electric vehicle market companies include Toyota Motor Corporation, Honda Motor Co. Ltd., Ford Motor Company, Volkswagen Aktiengesellschaft, General Motors Company, Hyundai Motor Company, and Nissan Motor Corporation Ltd, among many others.

• In 2024, Hyundai Motor Co. plans to double its hybrid vehicle lineup in response to slowing demand for pure electric vehicles (EVs). The company will expand its offerings to 14 hybrid models, while also announcing a 4 trillion won ($3 billion) share buyback initiative aimed at enhancing investor returns.

Global Hybrid Electric Vehicle Market Segmentation Coverage

• On the basis of the propulsion type, the market has been categorized into full hybrids, mild hybrids, plug-in hybrids, and others, wherein plug-in hybrids represent the leading segment. It is currently dominating the HEV market due to its ability to offer an extended electric-only range combined with the flexibility of a conventional engine. These vehicles appeal to environmentally conscious consumers seeking reduced emissions without compromising on long-distance travel capabilities, driven by advancements in battery technology and widespread availability of charging infrastructure.
• Based on the configuration type, the market is classified into series HEV, parallel HEV, and combination HEV, amongst which parallel HEV dominates the market. These vehicles lead the market owing to their superior efficiency and seamless integration of electric and internal combustion powertrains. This configuration allows simultaneous use of both power sources, making it ideal for varied driving conditions. Consumers are highly preferring parallel HEVs for their balanced performance, enhanced fuel economy, and suitability for urban as well as highway driving.
• On the basis of the vehicle type, the market has been divided into passenger cars, commercial vehicles, two-wheelers, and others. Among these, passenger cars accounts for the majority of the market share. These cars dominate the hybrid electric vehicle market, driven by their widespread use in personal and family transportation. Rising consumer demand for fuel-efficient and environmentally friendly vehicles, coupled with supportive government incentives, is bolstering the adoption of hybrid passenger cars. Manufacturers are actively expanding their hybrid offerings in this segment to cater to evolving consumer preferences.
• Based on the power source, the market is bifurcated into stored electricity and on-board electric generator wherein stored electricity represents the leading segment. It is the leading segment in the HVC market as advancements in battery technologies are enabling longer electric-only ranges. This power source supports reduced reliance on conventional fuel, aligning with growing environmental awareness and regulatory pressures. Consumers are favoring stored electricity hybrids for their operational efficiency and sustainability benefits.