LONDON--(BUSINESS WIRE)--Technavio analysts forecast the global hybrid commercial vehicle market to reach 1.68 million units by 2020 in terms of unit shipments, growing at a CAGR of over 17%, according to their latest report.
The research study covers the present scenario and growth prospects of the global hybrid commercial vehicle market for 2016-2020. To calculate the market size, the report considers the unit production of light and medium-duty trucks, heavy-duty trucks, and hybrid buses across regions like the Americas, EMEA, and APAC.
Technavio automotive analysts highlight the following three factors that are contributing to the growth of the global hybrid commercial vehicle market:
- Benefits of low fuel consumption and low cost of ownership
- Stringent emission norms
- Incentives and tax credits
Benefits of low fuel consumption and low cost of ownership
Hybrid powertrains offer more benefits such as fuel economy and low operating costs compared to internal combustion engine (ICE) vehicles. Such attributes are driving the market for hybrid commercial vehicles that run on both ICE and electricity. In the ICE mode, the vehicle converts the kinetic energy of the wheels into electricity and stores it for later use, and this provides improvements in fuel consumption. Hybrid commercial vehicles offer the best solution for fuel efficiency and lower pollutant emissions; these benefits stem from the start-stop system and regenerative braking mechanisms typical to hybrid vehicles.
Though hybrid commercial vehicles cost 15%-30% more than conventional ICE vehicles, the former are able to save considerable amounts of fuel. The use of regenerative braking systems in micro hybrid vehicles ensures a long life for the vehicle’s brake discs and pads as these do not wear out quickly. “Savings on fuel costs and the low maintenance costs of hybrid commercial vehicles further help lower operating costs, which makes such vehicles an attractive proposition for commercial vehicle owners. We expect such attributes to boost the sales of hybrid commercial vehicles in the future,” says Siddharth Jaiswal, a lead analyst at Technavio for the automotive manufacturing sector.
Stringent emission norms
Stringent emission norms have been devised by governments worldwide to minimize the negative effects of global warming and reduce carbon footprint. For instance, the EU has targeted to reduce the average fleet emission of 187 g carbon dioxide (CO₂)/km in 2011 to an average fleet emission of 175 g CO₂/km by 2017 and 147 g CO₂/km by 2020 for passenger cars and LCVs.
In addition, the EU had introduced the Euro VI norms in 2014, according to which nitrogen oxide emissions must be below 0.4 g/kWh and particulate emissions must be below 0.01 g/kWh. Japan, too, is in the process of introducing new emission norms that are similar to the Euro VI norms. Similarly, India and Russia are expected to apply the Euro IV and Euro V norms by the end of 2016. These norms may help expand the market for hybrid vehicles in many geographies.
“Currently, the key countries and regions that have implemented emission norms include the US, the EU, Japan, South Korea, India, China, and Canada. During the forecast period, we expect other countries such as Australia, Mexico, Russia, Turkey, and Brazil to implement emission standards,” says Siddharth.
Incentives and tax credits
The high upfront cost of hybrid commercial vehicles is a major factor affecting sales. In response, regulatory bodies across the globe are providing various incentives and tax benefits to increase the use of hybrid commercial vehicles. The transportation sector is a major utilizer of fossil fuels in many parts of the world. For instance, the transportation sector utilizes about two-thirds of the oil consumed in the US, and about 93% of the fuel consumed is derived from petroleum. This encourages the use of hybrid commercial vehicles to reduce the dependency on oil. India has started a program named Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles in India (FAME India) to promote the use of hybrid commercial vehicles.
Strong government support and financial incentives are expected to increase the popularity of hybrid commercial vehicles and encourage their use. In addition, governments across the globe are actively involved in the development of infrastructure. OEMs are also expanding their product range. These factors should strengthen buyer confidence and boost the market during the forecast period.
Browse Related Reports:
- Global Micro-Hybrid Vehicle Market 2015-2019
- Global Hybrid Electric Vehicles (HEVs) Market 2015-2019
- Hybrid Electric Vehicles (HEVs) Market in the US 2015-2019
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