Plug-In Hybrid Electric Vehicle Powertrain Market

Plug-In Hybrid Electric Vehicle Powertrain Market Size:

The global plug-in hybrid electric vehicle powertrain market size is expected to exhibit a growth rate (CAGR) of 10.1% during 2024-2032. The market is principally being driven by stringent environmental regulations, favorable government incentives, advancements in automotive infrastructure, significant research and development (R&D) investments, and growing consumer demand for sustainable, fuel-efficient vehicles.

Plug-In Hybrid Electric Vehicle Powertrain Market Analysis:

• Major Market Drivers: The market is driven by stringent environmental regulations, generous government incentives, and increasing consumer demand for eco-friendly, fuel-efficient vehicles. Additionally, advancements in battery technology and significant investments in research and development by key industry players further propel market growth. The push for reduced carbon emissions and the quest for sustainable transportation solutions also play crucial roles in driving the market.
• Key Market Trends: The plug-in hybrid electric vehicle powertrain market is witnessing trends such as the integration of advanced battery technologies, increased focus on reducing vehicle emissions, and enhancements in electric drivetrain efficiency. Automakers are investing in innovative powertrain designs to improve performance and range. Growing consumer awareness and a shift toward sustainable mobility solutions are also influencing market dynamics, driving the development of more sophisticated Plug-In Hybrid Electric Vehicle (PHEV) models.
• Geographical Trends: North America leads the plug-in hybrid electric vehicle powertrain market due to its stringent environmental regulations, substantial government incentives, and advanced automotive infrastructure. Significant investments in R&D by major automotive players and high consumer demand for sustainable vehicles further strengthen the region's position. The combination of supportive policies and technological advancements solidifies North America's dominance in the market.
• Competitive Landscape: The report has also provided a comprehensive analysis of the competitive landscape in the market. Competitive analysis such as market structure, key player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided. 
• Challenges and Opportunities: According to the plug-in hybrid electric vehicle powertrain market forecast, some of the key opportunities in the market include the expansion of government incentives aimed at promoting cleaner transportation solutions, advancements in battery technology that enhance vehicle performance and range, and a growing consumer preference for eco-friendly, fuel-efficient vehicles. Despite these opportunities, the market faces challenges such as high production costs, insufficient charging infrastructure, and strong competition from fully electric and traditional vehicles. To achieve significant market growth and maintain momentum, it will be essential to address these challenges effectively while capitalizing on the emerging opportunities for expansion.

Plug-In Hybrid Electric Vehicle Powertrain Market Trends:

Environmental Regulations and Incentives

Stringent environmental regulations and government incentives are major drivers for the plug-in hybrid electric vehicle (PHEV) powertrain market. Governments worldwide are implementing stringent emission standards to combat climate change, pushing automakers to develop cleaner technologies. Incentives such as tax rebates, subsidies, and grants make PHEVs more affordable for consumers, accelerating market growth. For instance, the FAME India Scheme, which stands for Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India, is an initiative by the Indian government to promote the adoption of electric and hybrid vehicles. As of July 2023, under FAME-II, a total of 832,824 electric vehicles were sold, including 740,722 e-two-wheelers, 83,420 e-three-wheelers, and 8,982 e-four-wheelers. The government has sanctioned 2,877 electric vehicle charging stations in various cities and highways and provided Rs. 800 crore in subsidies for establishing additional charging infrastructure. These policies not only reduce the financial burden on buyers but also encourage manufacturers to invest in research and development to produce more efficient and eco-friendly vehicles, thereby driving the plug-in hybrid electric vehicle powertrain market growth.

Rapid Technological Advancements

Advancements in battery technology and powertrain components significantly drive the PHEV powertrain market. Improved battery energy density, faster charging capabilities, and longer life cycles make PHEVs more appealing to consumers. Technological innovations in electric motors and power electronics enhance vehicle performance, efficiency, and reliability. Additionally, the integration of smart technologies and connectivity features provides better energy management and user experience. Continuous research and development (R&D) efforts by automotive manufacturers and tech companies lead to frequent technological breakthroughs, propelling the growth and adoption of PHEVs.

For instance, in June 2023, Lucid Group, Inc. announced a technology partnership with Aston Martin to supply Lucid-engineered and manufactured electric powertrain technology for Aston Martin's future battery electric vehicles (BEVs). This includes an ultra-twin motor drive unit, advanced battery technology, and Lucid's onboard charging unit, the Wunderbox. This partnership will support the launch of Aston Martin's first fully electric model in 2025, with their new in-house BEV platform being built around Lucid's current and future powertrain and battery innovations.

Rising Fuel Prices

The fluctuating and often rising prices of conventional fuels are creating significant plug-in hybrid electric vehicle powertrain demand, which offer better fuel efficiency and lower operating costs. For instance, the US Energy Information Administration (EIA) forecasts crude oil prices to rise in late 2024, with Brent crude, which ended July 2024 at $81 per barrel, expected to reach $85-90 by year-end. This is driven by falling global inventories due to OPEC+ production cuts. PHEVs can run on both gasoline and electricity, providing flexibility and reducing dependence on fossil fuels. As fuel prices increase, the cost savings from reduced fuel consumption become more significant, making PHEVs a cost-effective alternative. This economic advantage, combined with the growing awareness of sustainable practices, drives the demand for PHEVs and supports the expansion of the PHEV powertrain market.

Plug-In Hybrid Electric Vehicle Powertrain Market Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the market, along with forecasts at the global and regional levels for 2024-2032. Our report has categorized the market based on component, powertrain type, position type, and vehicle type.

Breakup by Component:

• Transmission
• Motor/Generator
• Battery
• Engine
• Controller
• Axles
• Others
   

Transmission accounts for the majority of the market share

The plug-in hybrid electric vehicle market report has provided a detailed breakup and analysis of the market based on the component. This includes transmission, motor/generator, battery, engine, controller, axles, and others. According to the report, transmission represented the largest segment.

Transmission accounts for the majority of the plug-in hybrid vehicle powertrain market share due to its crucial role in managing and optimizing power delivery from both the internal combustion (IC) engine and the electric motor. Efficient transmissions enhance fuel economy, improve driving dynamics, and ensure seamless integration between the two power sources. They are essential for maximizing the efficiency and performance of PHEVs, meeting diverse driving conditions and user demands, which makes them a significant component in the powertrain system.

For instance, in July 2023, IC Bus unveiled the next-generation CE Series school bus, an updated version of its flagship model. The redesigned CE Series features an electric powertrain that offers a quieter ride and three levels of selectable regenerative braking, enhancing battery efficiency and overall driving experience. This powertrain delivers up to 255 kW (342 hp) and is compatible with both alternating current (AC) and direct current fast charging (DCFC).

Breakup by Powertrain Type:

• Series Hybrid
• Parallel Hybrid
   

Parallel hybrid holds the largest share of the industry

A detailed breakup and analysis of the market based on the powertrain type have also been provided in the report. This includes series hybrid and parallel hybrid. According to the report, parallel hybrid accounted for the largest market share.

Parallel hybrid systems hold the largest share of the plug-in hybrid vehicle powertrain industry due to their efficient use of both internal combustion engines and electric motors. The electric battery gets recharged via a regenerative braking. This configuration allows for better fuel economy, reduced emissions, and enhanced performance by seamlessly switching or combining power sources based on driving conditions. Additionally, parallel hybrids are cost-effective to manufacture and can be integrated into existing vehicle platforms, which, in turn, is creating a positive plug-in hybrid electric vehicle powertrain market outlook. Their flexibility in various driving scenarios further boosts their market dominance.

For instance, in March 2024, Twin Disc presented its parallel hybrid marine system at the Electric & Hybrid Marine Expo North America. This technology integrates a diesel engine with an electric motor, allowing for energy storage and reducing fuel consumption and emissions. It is designed for vessels that operate frequently in zero-emission zones or restricted areas with slow-speed operation.

Breakup by Position Type:

• Front Wheel Drive
• Rear Wheel Drive
• All Wheel Drive
   

Front wheel drive represents the leading market segment 

The report has provided a detailed breakup and analysis of the market based on the position type. This includes front wheel drive, rear wheel drive, and all wheel drive. According to the plug-in hybrid electric vehicle powertrain market research report, front wheel drive represented the largest segment.

Front-wheel drive (FWD) is the leading segment in the plug-in hybrid vehicle (PHEV) powertrain market due to its efficiency and cost-effectiveness. FWD systems are lighter and simpler, reducing manufacturing costs and improving fuel efficiency. They offer better traction in various driving conditions, particularly in wet or slippery environments. Additionally, FWD allows for more interior space, as the absence of a rear drive shaft creates a flatter floor. These advantages make FWD a popular choice among manufacturers and consumers in the PHEV market.

Breakup by Vehicle Type:

• Passenger Cars
• Commercial Vehicle
   

A detailed breakup and analysis of the market based on the vehicle type have also been provided in the report. This includes passenger cars and commercial vehicles.

In the plug-in hybrid electric vehicle (PHEV) market, passenger cars are driven by several key factors. Primarily, the growing consumer demand for environmentally friendly vehicles, combined with rising fuel prices and stringent emission regulations, encourages adoption. Technological advancements in battery efficiency and cost reduction make PHEVs more attractive by providing better range and performance. Government incentives, including tax credits and rebates, further boost appeal. Additionally, consumer preferences for versatility and reduced range anxiety, as PHEVs offer a combination of electric-only driving with the flexibility of a gasoline engine, contribute to their growing popularity. Overall, the increasing emphasis on sustainability and innovation in personal transportation drives the expansion of PHEVs in the passenger car segment.

In the commercial vehicle sector, the adoption of plug-in hybrid electric vehicles (PHEVs) is driven primarily by economic and regulatory factors. Fleet operators are increasingly motivated by the potential for cost savings through reduced fuel consumption and lower emissions, which align with corporate sustainability goals and regulatory compliance. Government policies and incentives specifically targeting commercial fleets, such as grants and tax breaks, make PHEVs more financially viable. Additionally, advancements in battery technology and charging infrastructure enhance the practicality of PHEVs for commercial use. As industries face stricter emissions standards and urban areas impose low-emission zones, PHEVs offer a practical solution for businesses seeking to reduce their environmental impact while maintaining operational efficiency.

Breakup by Region:

• North America
• Asia-Pacific
• Europe
• Latin America
• Middle East and Africa
   

North America leads the market, accounting for the largest plug-in hybrid electric vehicle powertrain market share

The report has also provided a comprehensive analysis of all the major regional markets, which include North America, Europe, Asia Pacific, Latin America and the Middle East and Africa. According to the report, North America represents the largest regional market for plug-in hybrid electric vehicle powertrain.

North America leads the plug-in hybrid vehicle (PHEV) powertrain market for several reasons. Stringent environmental regulations and substantial government incentives encourage the adoption of cleaner technologies. The region also benefits from advanced automotive infrastructure and significant investments in research and development by key industry players. Moreover, increasing consumer awareness and demand for sustainable and fuel-efficient vehicles further drive market growth. The combination of supportive policies, technological innovation, and strong market demand reinforces North America's dominance in the PHEV powertrain market.

For instance, in January 2023, General Motors Company invested $918 million in four powertrain production facilities in the U.S. This investment will enable GM to establish four plants dedicated to producing sixth-generation small block V8 powertrains and EV components.

Competitive Landscape:

• The report has also provided a comprehensive analysis of the competitive landscape in the market. Competitive analysis such as market structure, key player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided. 
• The plug-in hybrid electric vehicle (PHEV) powertrain market features a dynamic competitive landscape with a mix of established automotive giants and innovative newcomers. Key players focus on advancing battery technology, improving powertrain efficiency, and reducing costs to gain a competitive edge. Companies invest heavily in research and development to enhance electric range, integrate advanced charging solutions, and meet stringent emissions regulations. Strategic partnerships and collaborations with technology providers, alongside expansion into emerging markets, are common strategies. Additionally, regulatory incentives and government policies play a crucial role in shaping market dynamics. The growing emphasis on sustainability and consumer demand for versatile, eco-friendly vehicles drive competition and innovation in this evolving sector.
• For instance, in January 2024, VinFast, a Vietnamese electric vehicle manufacturer, signed a memorandum of agreement with the Tamil Nadu state government to establish electric vehicle manufacturing facilities in India. This move aims to penetrate the world's third-largest vehicle market. The collaboration involves a total investment of up to $2 billion, with an initial commitment of $500 million for the first phase of the project, which will span five years.
• In September 2023, LG Magna e-Powertrain Co., a joint venture between South Korea's LG Electronics Inc. and Canada's Magna International Inc., announced plans to establish an electric vehicle parts factory in Hungary. This initiative is part of LG Electronics' broader strategy to become a leader in the future mobility sector. LG Magna, an EV powertrain manufacturer, is set to start operations in 2026 at the Miskolc facility, initially focusing on producing driving motors. The company will also adapt production to meet demand for other components in the world's second-largest clean vehicle market, though specific financial details of the investment were not disclosed.
• In July 2023, McLaren Applied Ltd. and BOLD revealed a partnership to develop high-performance electric powertrains. McLaren Applied has teamed up with BOLD to leverage BOLD’s expertise in designing and producing lightweight, high-performance battery pack systems.

Plug-In Hybrid Electric Vehicle Powertrain Market News:

• In July 2023, Volvo Trucks Malaysia unveiled the region's first fully electric Heavy Duty Prime Mover. The Volvo FH Electric, FM Electric, and FMX Electric models feature an electric powertrain with either two or three motors delivering up to 490 kW and 2,400 Nm of torque, depending on the application. The battery capacity ranges from 180 kWh to 540 kWh across two to six battery packs, offering a claimed travel range of up to 300 km on a single charge at a gross combination weight (GCW) of 44 tons.
• In April 2023, Modern Automotives became the first Indian company to gain approval for supplying Differential Pinion Shafts to BMW AG Munich for their electric powertrain. The order projects the delivery of 2.5 million units by 2034.
• In February 2024, Maruti Suzuki announced plans to launch affordable hybrid technology by 2025, starting with the Fronx model featuring a new series hybrid powertrain. This system, which acts as a range extender, will be cheaper to produce than traditional hybrids. The Fronx, along with future models like the Baleno and Swift, will use this in-house developed system to improve cost-effectiveness and fuel efficiency. Maruti Suzuki aims to significantly boost hybrid vehicle volumes, potentially reaching 800,000 units annually by the end of the decade.
• In December 2023, the "EV-Home Power Partnership," a joint simulation initiative between Ford and Resideo Technologies, Inc., was launched to explore vehicle-to-home (V2H) energy management. This project investigates how electric vehicle batteries can optimize home energy management. It aims to help consumers potentially reduce monthly electric bills, alleviate pressure on the American power grid, support cleaner energy use, and enhance homeowner comfort. The partnership will assess, test, and quantify the advantages of bi-directional EV charging in combination with a Resideo smart thermostat.

Plug-In Hybrid Electric Vehicle Powertrain Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the plug-in hybrid electric vehicle powertrain market from 2018-2032.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the global plug-in hybrid electric vehicle powertrain market.
• The study maps the leading, as well as the fastest-growing, regional markets.
• Porter's five forces analysis assists stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the plug-in hybrid electric vehicle powertrain industry and its attractiveness.
• The competitive landscape allows stakeholders to understand their competitive environment and provides insight into the current positions of key players in the market.