Hybrid Vehicle Market Trends

Growth Drivers

• Rise in Petrol Prices - From a recent low of about USD 80 per barrel in September 2021 to over USD 90 in October 2021, Brent oil prices increased by about 11%. People are considering environmentally friendly options that allow them to save money on fuel and lower carbon emissions when driving as a result of rising prices for gasoline, diesel, and compressed natural gas (CNG) as well as high pollution levels. Hence demand for hybrid vehicle is estimated to increase.
• Growing Government Initiatives for the Adoption of Hybrid Vehicles - The Ministry of Heavy Industries created the Faster Adoption and Manufacture of Hybrid and Electric Vehicles in India (FAME INDIA) programme in 2015 in India to encourage the use of electric and hybrid cars (xEVs) throughout the nation. With effect from April 1, 2019, Phase 2 of the FAME India Plan was put into place for a duration of 5 years with budgetary support of USD 1.34 billion. This phase seeks to give support through subsidies, 7090 e-Buses, 5,00,000 e-4 Wheeler Passenger cars, and 10,00,000 e-2 Wheelers for the electrification of public and shared transportation.
• Surge in Adoption of Hybrid Vehicles - In America, it was predicted that about 55% of car owners would purchase an electric or hybrid vehicle in 2021.
•  Growth in Charging Centers - Between October 2021 and January 2022, 678 public EV charging stations—roughly 2.5 times the previous totals—were installed in these 9 cities of India.
• Upsurge in Production of Bio-Fuel - World biofuel production expanded gradually, rising from about 186 000 barrels of oil equivalent per day in 2000 to approximately 2 million barrels of oil equivalent per day in 2021.

Challenges

• High Initial Price
• High Maintenance and Repair Cost
• Surge in Adoption of FCEV & BEV - Significant car makers, such as Volkswagen, BYD, and Tesla, are strongly invested in the creation of battery electric vehicles (BEV) or pure electric vehicles. Among other benefits, these cars eliminate the need for conventional gasoline and combustion engines. Fuel cell electric cars (FCEV) also provide advantages including net-zero emissions, a long driving range, simple refueling, and silent operation. Thus the, governments have been incentivizing the sale of BEVs and FCEVs through different initiatives.