Europe Mild Hybrid Vehicles Market Size (2024 - 2029)

Europe Mild Hybrid Vehicles Market Analysis

The Europe Mild Hybrid Vehicles Market size is estimated at USD 16.42 billion in 2024, and is expected to reach USD 20.81 billion by 2029, growing at a CAGR of 9.25% during the forecast period (2024-2029).

The European mild hybrid vehicles market is experiencing growth, driven by the growing demand for fuel-efficient vehicles, stringent emission regulations, and the transition toward sustainable transportation solutions among consumers. These trends are expected to propel the market forward during the forecast period.

Mild hybrid vehicles offer cost-effective and various environmental benefits while minimizing the need for major infrastructure changes.

Additionally, European governments are supporting the shift toward greener transportation. Incentives such as tax relaxation and subsidies make mild hybrid vehicles more attractive choice to buyers. The regulations aiming to reduce carbon emissions are also pushing both car manufacturers and consumers toward more sustainable options, creating room for mild hybrids to grow.

• From 2025 onwards, Regulation (EU) 2019/631 will set stricter EU-wide CO2 fleet targets: a 15% reduction by 2025 for both cars and vans and, from 2030, a 50% reduction target for vans and a 55% reduction target for cars, all relative to a 2021 baseline. It will also set a zero-CO2 emission target for new cars and vans from 2035 onwards.

However, the dominance of strong hybrids and battery electric vehicles (BEVs) in European countries such as Germany, France, Sweden, Norway, and the Netherlands is likely to act as a major restraint for the growth of mild hybrid vehicles in the region. The penetration of all-electric vehicles in Europe has showcased considerable growth in recent years, with sales of battery electric vehicles (BEVs) touching 54.7% in July 2023 compared to the same month in 2022. Therefore, the adoption of mild hybrid models, which integrate an internal combustion engine (ICE) in their powertrain, is likely to witness slower growth compared to its counterparts.

France is one of the fastest-growing countries in the European automotive industry. French consumers are highly receptive to mild hybrid vehicles. Thus, companies are focusing on establishing a nationwide distribution network and launching new models.

The top automotive companies, such as Volkswagen and Suzuki, are making huge investments in R&D activities, technological advancements, product launches, and capacity and infrastructure expansions. This move will help make transitions in the automotive industry by launching mild hybrid engines, which are sustainable and fuel-efficient, along with the integration of smart technologies.

• In September 2023, FIAT presented the Fiat 600 Hybrid, MHEV Mild-Hybrid engine to reduce fuel consumption by up to 15%. The model is available for the Italian market at EUR 19,950 with scrapping and financing.

Thus, such investments made by automotive giants, coupled with various advancements in mild hybrid systems and strategic moves for various production activities, will drive market growth.

Europe Mild Hybrid Vehicles Industry Segmentation

A mild hybrid refers to a vehicle with an internal combustion engine supported by a small electric drive. The electric motor recovers braking energy (recuperation) and makes it available later as additional drive power to reduce fuel consumption. Mild hybridization always requires installing an e-machine with an inverter in the powertrain in addition to the combustion engine.

The European mild hybrid vehicles market is segmented by battery type, vehicle type, and country. By battery type, the market is segmented into less than 48 volt battery, 48 volt battery, and above 48 volt battery. By vehicle type, the market is segmented into passenger cars and commercial vehicles. By country, the market is segmented into Germany, United Kingdom, Italy, France, Spain, and Rest of Europe.

The report offers market size and forecasts for mild hybrid vehicles in value (USD) and volume (units) for all the above segments.