Automotive Parallel Hybrid Power System Market

Automotive Parallel Hybrid Power System Market Size

The global automotive parallel hybrid power system market was valued at USD 63.2 billion in 2024 and is projected to grow at a CAGR of 8.2% between 2025 and 2034. Policies that seek to achieve a reduction in the emission of greenhouse gases and an improvement in the efficiency of fuel utilization are the main cause pushing the evolution to hybrid electric systems with a cleaner power. Almost every state has signed a pledge to lower emissions, and together with these new targets there are different forms of policies employed: tax cuts, subsidies, and even the encouragement of hybrid electric vehicles.

Looking broadly at the world, following the decision made by the European Union to set new emissions targets for new passenger vehicles in January 2023, the bloc imposed a 95g CO2/km average limit on the fleet of cars to which the policy is to apply. This policy measure provided motivation for automotive companies to speed up the transition to hybrid and electric vehicles that would allow them to fulfill legal requirements while also catering to consumer expectations for quick and environmentally sustainable transportation options. Other examples of such efforts include a focus on fuel efficiency and lowering GHG emissions in the design of hybrid power systems.

Inefficient internal combustion engine fueled cars are losing people’s attention due to prevalence of cost because of the spiraling fuel prices, and in similar lines, parallel hybrid vehicles have been developed to enhance fuel economy by optimizing the combined connection between IC engines and electric motors. In return, this minimizes the fuel consumption as well as the overall cost of operating the vehicle. This economic gain that hybrid vehicles provide, especially in comparison to ICE vehicles, is crucial in their general acceptance and usage in cost-oriented regions.

Automotive Parallel Hybrid Power System Market Trends

The rising concern about vehicle emissions and climate change, there is an unprecedented demand for hybrid cars that allow for an eco-friendly alternative. Hybrid cars reduce tailpipe emissions but still use the internal combustion engine, so they serve as an intermediate option for full electric vehicles. The automotive sector, including the government, is making serious efforts to manifest cars that are environmentally friendly and promote sustainability. In light of the increase in target customers who are willing to go green, there is an emerging global trend towards hybrid power systems.

Firstly, parallel hybrids and hybrid power systems are emerging as an intermediate option between fully electric and ICE cars, vehicles, and EVs. Selling points for hybrids include clean electric propulsion while enhancing the efficiency of conventional engines. As hybrid systems become more efficient and affordable, this trend is expected to grow over time.

With the gradual evolution of hybrid batteries, the hybrid power systems market is continually blooming. In addition, next-generation technologies like solid and lithium-sulphur batteries are expected to have quicker charging and better safety, alongside significantly improved gravimetric energy density. Because of these enhancements, the cost and weight of hybrid systems would decrease significantly, resulting in manufacturers increasing the span of their hybrid vehicles and making them easier to market to society.

In July 2023, Connect Robotics, in lithium AI’s Meta Chang, and QuantumScape, a pioneer in next-generation battery technology, announced they have developed a solid-state lithium metal battery and intend to sell these for EV and hybrid applications. When compared to traditional lithium-ion batteries, these have higher energy density and faster charging speed, suggesting that these would solve problems related to hybrid power systems.

Automotive Parallel Hybrid Power System Market Analysis

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Based on component, the market is segmented into electric motor, ICE, battery, power electronics, and transmission system. In 2024, the ICE holds around market share of 39% and is expected to exceed USD 50 billion by 2034.

• ICE vehicles have such a high demand and are globally so common, as there are fuel stations at every corner, and for any supply chain requirement, firing up an ICE vehicle is as simple as it gets. They also tend to be cheaper and cost-effective when compared to hybrid or electric vehicles, especially in developing nations.
  
• Considering the widespread use of ICE vehicles, it’s no surprise that their vendors are heavily emphasizing Research and Development every day. Places with poor electric infrastructure or places where powered charging will cost you a fortune will always benefit from the presence of ICE vehicles. Within the competition of electric cars, Toyota declares that its newest engine will break through the world market. Considering their clientele, the company has recommended developing its engine for the regions that have a shortage of electronic capacity, as the fuel efficiency of the engine can be enhanced by 15% according to Toyota's estimations.
  
• Considering this newest addition to the Dynamic Force Engine, there’s no end to the technology getting better every time while keeping ICE vehicles in the market while complementing their replacement trend.

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Based on the vehicle, the automotive parallel hybrid power system market is divided into passenger cars, two-wheelers and commercial vehicles where the passenger cars segment held around 64% of the share in 2024.

• Since smaller and fuel-efficient SUVs are in high demand, Hyundai decided to introduce Exter, which will cater to the needs of budget-conscious individuals as well as city commuters. Its versatility, low cost, and sophisticated features within the vehicle give it a competitive edge in the market. In its service, it strengthens the role of passenger vehicles within the automotive market, which can grab the multiplier effect and splurge: first-time owners looking for a dependable car suitable for an everyday needs range market.
  
• They are deeply rooted in society and have many developing internal networks, such as road networks, servicing facilities, etc., in developed countries and urban areas. The emergence of small fuel-efficient models, as well as hybrid and electric models focused on fuel efficiency, will serve this purpose as well in a green-driven market as it is today.

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In 2024, the U.S. region accounted for a automotive parallel hybrid power system market share of over 78% and is expected to exceed USD 30 billion by 2034.

• They operate a well-balanced grid of infrastructure such as road networks and service stations, which enhances their operations in both developed and developing cities. The evolution of smaller and fuel-efficient cars, as well as hybrids and electric vehicles, is also highly beneficial in a time when the public is becoming more and more fuel conscious.
  
• In the U.S, there is daily a strong demand for personal vehicles through authorities such as Ford, General Motors, and Tesla boosting the innovation and manufacture of not only conventional cars but also hybrid vehicles with growing cultures. Due to its big space and population, people are ever driving cars for cruising or even leisure activities.
  
• There are also policies and incentives that the government offers to ensure the adoption of hybrid along with electric vehicles so as to increase the size of the market. As reported by Consumer Affairs, the number of households owning a single vehicle went up by 7.2% in 2018 from 119 million households.
  

The growth of automotive parallel hybrid power system market in Europe is largely driven by the advancements in hybrid technology, environmental concerns and stringent EU regulations.

• To promote the development and acceptance of hybrid and electric vehicles, carbon-emitting limits have been put in place by the European Union.
  
• The regulations of the European Union and other countries related to transportation and personal vehicle use, as well as the promotion of green cars, have led to an increase for them. Europe is also well known for its development in public transport, which supplements the usage of cars in urban and rural areas.
  
• There is a manifestation in society to buy coupled vehicles that are energy efficient and have a low rate of emission. This has facilitated a flourishing within the business in Germany. Due to this demand in 2023, there is an increase in the proportion of hybrid automobiles by 23% of total eco-friendly automobiles sold in Germany.
  

The growth of automotive parallel hybrid power system market in Asia Pacific is largely driven by the stringent regulations and industry initiatives.

• Japan, India, China, and South Korea have established to be the strong players in the automotive market owing to their extensive demographic, fast-paced urbanization, and the burgeoning middle-class population. The scenario is slightly different for the Chinese market, there has been an upsurge in local enterprises and that anthropocentric development has garnered the government support towards hybrid and electric vehicles and hence while in 2024, vehicle sales across China turned out to be 5.3% higher than in the previous year, sales of new energy vehicles NEVs, increased more significantly by 40.7%.Domestic firms such as BYD excelled as foreign firms gradually lost their stronghold in the market, which is expected.
  
• The Japanese market, highlighted by the presence of Toyota and Honda, continues to be on top in hybrid benchmarks alongside the demand on the Chinese market being fulfilled via controlled profit margins due to government grants. Rapid advancements among the electric vehicle (EV) and hybrid portfolios have been witnessed among South Korean Kia and Hyundai. India, on the other hand, saw an upward trend of disposable income that maximized the demand for low-cost and fuel-efficient vehicles.
  

Automotive Parallel Hybrid Power System Market Share

• In 2024, Bosch & ZF empowered the market with their automotive parallel hybrid power systems and maintained their cooperation with automakers so as to retain the steady share of 17% they occupied back in 2024.
  
• Both companies are key players in the design of new elements for parallel hybrid systems such as electric motors, inverters, actuators, and control systems. Bosch’s established asset in power electronics and energy management, and its worldwide production network, has created to it the position of preference among car manufacturers implementing hybrid technologies.
  
• In a similar tone, ZF integrates innovative hybrid transmissions and integrated driveline management systems into their portfolio of hybrid cars due to the increased need in hybrid cars’ efficiency. They also stay relevant as they can offer flexible and customized solutions for all kinds of vehicles from compact cars to SUVs.
  

Automotive Parallel Hybrid Power System Market Companies

Major players operating in the automotive parallel hybrid power system industry are:

• Aisin
• BorgWarner
• Continental
• Denso
• Hyundai Mobis
• Magna International
• Bosch
• Schaeffler
• Valeo
• ZF Friedrichshafen
  

The competition in the automotive parallel hybrid power system market is among automakers, who have been around for some time and firms that specialize in technology. Such a competition exists owing to the increase in demand for environmentally friendly and fuel-efficient vehicles. Such integration is the goal of the traditional automakers that are seeking to modify their compact cars, sport vehicles and luxury vehicles with Integrated Parallel Hybrid Systems.

The traditional automotive industry is investing vast amounts of money towards embedded-switching research to meet set emission targets without compromising battery life and performance. Such a strategy is widely adopted in conjunction with working together with electronics and battery suppliers, assisting with hybrid system development SOI or System on Interposer.

Automotive Parallel Hybrid Power System Industry News

• In December 2024, Stellantis transferred 50% Comau’s shares to One Equity Partners but retained minority ownership of 49.9%. The Comau expansion strategy has provided the company with the opportunity to meet the increased automation technology demand.
  
• In October 2024, CATL of China introduced the Freevoy battery which lets an extended range hybrid electric vehicle with a large gasoline engine that can be charged go as far as 400 km and this supports the enthusiasm towards hybrid electric cars equipped with big battery packs.
  
• In November 2024, Renault and Geely established Horse Powertrain Limited which is a new joint venture aimed at designing and producing dedicated hybrid and internal combustion engine powertrains for 80% of the world’s ICE and hybrid electric vehicle market.
  

The automotive parallel hybrid power system market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue ($ Mn/Bn) & shipment (Units) from 2021 to 2034, for the following segments:

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Market, By Component

• Electric motor
• ICE
• Battery & energy storage systems
• Power electronics
• Transmission system

Market, By Vehicle

• Passenger cars
  • Compact cars
  • Mid-size cars
  • SUVs & luxury cars
• Commercial vehicles
  • Light commercial vehicles (LCVs)
  • Heavy commercial vehicles (HCVs)
• Two-wheelers

Market, By Vehicle

• Full hybrid system
• Mild hybrid system

Market, By Application

• Urban transportation
• Intercity travel
• Off-highway applications

Market, By Technology

• Regenerative braking systems
• Start-stop systems
• Electric-assist systems

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
  • Nordics
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ
  • Southeast Asia
• Latin America
  • Brazil
  • Mexico
  • Argentina
• MEA
  • UAE
  • Saudi Arabia
  • South Africa