Latin America Hybrid Electric Vehicle

Latin America Hybrid Electric Vehicle Market Research Report: Forecast (2023-2028)

By Propulsion Type (Plug-in Hybrid Electric Vehicle [PHEV], Hybrid Electric Vehicle [HEV], Natural Gas Vehicle [NGV]), By Electric Powertrain Type (Parallel hybrid, Series Hybrid, Combined Hybrid, By Read more

  • Automotive
  • Jan 2023
  • 167
  • AT55020

Market Definition

Hybrid Vehicles are powered both by an ICE (Internal Combustion Engine) and one or more electric motors that consume energy stored in batteries. They combine the benefits of high fuel economy & low tailpipe emissions, along with the power & range of conventional vehicles. In order to curb the harmful emissions released from fossil fuel-based vehicles, hybrid vehicles are being increasingly manufactured in several regions worldwide for both passenger & commercial purposes.

Market Insights

The Latin America Hybrid Electric Vehicle Market is projected to grow at a CAGR of around 6% during the forecast period, i.e., 2023-28. It owes to the rising prices of fossil fuels and increasing number of stringent emission norms being imposed by governments of various countries worldwide. The prices of conventional fuels have been increasing year-on-year due to declining number of crude oil & natural gas reserves.

The same aspect has increased concerns among governments & automotive OEMs to find a cost-efficient & sustainable alternative to fossil fuel-based vehicles. As a result, automakers are increasingly manufacturing hybrid vehicles in order to reduce the alarming levels of harmful carbon emissions, and address the ever-rising fossil fuel prices. In addition, the launch of incentive schemes by governments of countries like Brazil, Mexico, & Columbia is also contributing to the surging sales of hybrid vehicles across Latin America.

  • In 2018, the Brazil government announced to reduce the tax on mass produced electric & hybrid vehicles from 25% to 18%. Various companies like BYD, Volvo, & Ford are increasingly setting up manufacturing units of hybrid vehicles in the country.
  • In November 2022, BYD launched two SUV models in Brazil, viz., the hybrid Song and the all-electric Yuan, both priced at around USD50, 540.
Report Coverage Details
Study Period Historical Data: 2018-21
Base Year: 2022
Forecast Period: 2023-28
CAGR (2023-2028) 6%
Country Covered Mexico, Brazil, Argentina, Columbia, Rest of Latin America
Key Companies Profiled Hyundai Motor Company, General Motors, BYD Company Limited, BMW AG, Groupe Renault, Volvo Group, Nissan Motor Company Limited, Ford Motor Company, Toyota Motor Corporation, Others
Unit Denominations USD Million

 

These automakers are offering a wide range of fuel-efficient hybrid vehicles with advanced features, which, in turn, is attracting more & more customers across the country, thereby stimulating the overall expansion of the hybrid vehicle market in Latin America.

Recent Developments

  • In 2021, BMW announced to launch various Plug-in Hybrid Electric Vehicles (PHEV) such as BMW 330e /330e xDrive Sedan, BMW 530e/530e xDrive Sedan and other model cars in Columbia.
  • In 2020, Volvo launched the plug-in hybrid (PHEV) version of XC40 SUV in Brazil. The company also has forecasted to sell around 500-550 units at the end of same year.

Key Trend in the Latin America Hybrid Electric Vehicle Market

  • Development of Ethanol-based Hybrid Cars

Due to the ongoing research and development in hybrid vehicles, automakers are actively focusing on finding innovative solutions to reduce carbon emissions. OEM’s like Stellantis and CAOA are into the development of hybrid vehicles based on ethanol & electric motors in order to lower emission levels to much more extent. In 2022 CAOA launched five new models – four ethanol-based hybrids and one fully electric model in Brazil. This trend is projected to bode well for the Latin America Hybrid Electric Vehicle Market in the coming years.

Market Segmentation

Based on Propulsion Type:

  • Plug-in Hybrid Electric Vehicle (PHEV)
  • Hybrid Electric Vehicle (HEV)
  • Natural Gas Vehicle (NGV)

Of these three, HEVs (Hybrid Electric Vehicles) are estimated to hold a considerable market share during 2023-28, owing mainly to their lower ownership costs than their counterparts. The other vehicle types like PHEVs (Plug-in Hybrid Vehicles) and fully electric vehicles available in the market have higher costs owing to the high degree of product hybridization. Additionally, the lack of charging stations across the region would further increase HEV sales in the future as these vehicles could recharge their batteries by themselves using the regenerative braking systems, wherein energy lost during braking gets utilized at a later stage to charge the batteries. Hence, HEVs are expected to witness the fastest growing sales in Latin America during the forecast period on account of the lack of inconvenience associated with finding charging stations & spending additional time powering up.

Based on Electric Powertrain Type:

  • Parallel hybrid
  • Series Hybrid
  • Combined Hybrid

Here, parallel hybrid is projected to attain a considerable market share, owing primarily to the growing deployment of regenerative breaking technology in vehicles, which restores the energy of the battery at the time of breaking and thus eliminated the need for external charging infrastructure. In addition, parallel hybrid vehicles provide high performance and also aid in efficient energy conservation while eliminating mechanical complexity when compared to other powertrain types. Hence, owing to the better performance and reduced dependence on charging infrastructures, the demand for parallel hybrid vehicles is estimated grow notably in Latin America over the coming years.

Based on Vehicle Type:

  • Passenger Cars
  • Commercial Vehicles
    • Light Commercial Vehicles
    • Medium & Hugh Commercial Vehicles

Of both, passenger cars acquired a significant share of the Latin America Hybrid Electric Vehicle Market. It owes to their growing demand for consumers to travel at shorter distances. Trucks & busses often travel long distances, which requires frequent charging, and with the limited availability of the EV charging infrastructure in Latin America, it restricts the demand for commercial hybrid vehicles. Moreover, automakers are increasingly focusing in hybridizing passenger vehicles owing to less production costs incurred than commercial vehicles, i.e., another aspect projected to augment the demand for passenger hybrid vehicles across Latin America in the coming years.

Regional Landscape

Geographically, the Latin America Hybrid Electric Vehicle Market expands across:

  • Mexico
  • Brazil
  • Argentina
  • Columbia
  • Rest of Latin America

Of all countries, Mexico acquired a significant share of the Hybrid Vehicle Market across Latin America. It owes to the extensive presence of automakers like Diamler, Volvo, & Ford, which are increasingly manufacturing hybrid vehicles for both domestic & international markets. In addition, the surge in the disposable income of Mexicans, coupled with stringent government regulations for reducing carbon emission, are also promoting the sales of hybrid vehicles in the country.

More & more Mexican consumers are availing government incentives like exemption of local taxes & emission control verifications. In 2018, Mexico reported a 68% growth in EV sales, and hybrid vehicle sales compared with 2017 touched over 17,800 units. In addition, the increasing development of hybrid & electric vehicle charging infrastructure in the country is another prominent aspect projected to drive the Mexico Hybrid Vehicle Market through 2028.

Market Dynamics:

Key Driver: Ever-Increasing Deployment of Stringent Emission & Fuel Economy Norms

Hybrid vehicle sales have been growing steadily in Latin America, mainly due to the imposition of strict emission-related norms by governments of countries like Brazil, Mexico, Chile etc., in order to lower CO2 emissions from the automotive sector. For instance, in 2022, the Brazilian government implemented PROCONVE L-7 and further announced the implementation of PROCONVE L-8 emission norms in 2025. These automotive emission norms extremely focus on lowering harmful gasses like carbon monoxide, hydrocarbons, nitrogen oxides, etc., from automotive due to which, the OEMs like Toyota, Volvo, and others across the region have been gradually shifting towards the manufacturing of hybrid electric vehicles.

According to the German automobile association (ADAC) the hybrid vehicles has been efficient in saving fuel consumption by 15-25%, eventually leading to a slowdown in the emission of harmful gasses. Additionally, consumers have been more comfortable with the adoption of hybrid vehicles owing to their fuel economy feature which would further drive the market during the forecast period.

Possible Restraint: Growing Penetration of Fully Electric Vehicles

The development and commercialization of the fully electric vehicles in Latin America would act as one of the main growth restraints for the Hybrid Vehicle Market through 2028. Fully electric vehicles are efficient in controlling 100% of carbon emissions, whereas hybrid vehicles can only control around 30%. The rise in carbon emission norms and various targets set for achieving zero-carbon economies are boosting the sales of fully electric vehicles, eventually limiting the sale of hybrid vehicles.

In addition, the rising research & development and investments by automakers like Volkswagen, BYD, & Tesla toward EV production are also leading to the adoption of fully electric vehicles across the region. Advantages like high driving range, fast refueling, noiseless operations, etc., are positively impacting the demand for fully electric vehicles. Furthermore, active government efforts for promoting battery-based & fuel-cell electric vehicles would further boost the demand for fully electric vehicles in countries like Mexico, Brazil, & Columbia, and, consequently, hamper the hybrid vehicle market expansion in the coming years.

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Frequently Asked Questions

A. The Latin America Hybrid Electric Vehicle Market is projected to grow at a CAGR of around 6% during 2023-28.

A. HEVs are anticipated to emerge as an opportunity area for the leading players in the Latin America Hybrid Electric Vehicle Market during the forecast period.

A. The implementation of stringent emission norms for the automotive sector is projected to drive the Latin America Hybrid Electric Vehicle Market through 2028.

A. Hyundai Motor Company, General Motors Company, BYD Auto Company Limited, BMW AG, Groupe Renault, The Volvo Group, Nissan Motor Company Limited, Ford Motor Company, Toyota Motor Corporation, and others are the key companies in the Latin America Hybrid Electric Vehicle Market.

A. Mexico is anticipated to dominate the Latin America Hybrid Electric Vehicle Market during 2023-28.

  1. Market Segmentation
  2. Introduction
    1. Research Process
    2. Assumption
    3. Market Definition
  3. Executive Summary
  4.  Latin America Hybrid Electric Vehicle Market Trends & Development
  5.  Latin America Hybrid Electric Vehicle Market Dynamics
    1. Growth Drivers
    2. Challenges
  6. Latin America Hybrid Electric Vehicle Market Supply Chain Analysis
  7. Latin America Hybrid Electric Vehicle Market Policies, Regulations, and Standards
  8. Latin America Hybrid Electric Vehicle Market Hotspot and Opportunities
  9.  Latin America Hybrid Electric Vehicle Market Outlook, 2018-2028F
    1. Market Size and Analysis
      1. By Revenues (USD Million)
      2. By Unit Sold (Thousand Units)
    2. Market Share and Analysis
      1. By Propulsion Type
        1. Plug-in Hybrid Electric Vehicle (PHEV)
        2. Hybrid Electric Vehicle (HEV)l
        3. Natural Gas Vehicle (NGV)
      2. By Electric Powertrain Type
        1. Parallel hybrid
        2. Series Hybrid
        3. Combined Hybrid
      3. By Hybridization
        1. Full Hybrid
        2. Micro-Hybrid
        3. Mild Hybrid
      4. By Vehicle Type
        1. Passenger Cars
        2. Commercial Vehicles
          1. Light Commercial Vehicle (LCV)
          2. Medium & High Commercial Vehicle (MHCV)
        3. Two Wheeler
      5. By Countries
        1. Mexico
        2. Brazil
        3. Argentina
        4. Columbia
        5. Rest of Latin America
      6. By Company
        1. Competition Characteristics
        2. Market Share & Analysis
  10. Mexico Hybrid Electric Vehicle Market Outlook, 2018-2028F
    1. Market Size & Analysis
      1. By Revenues (USD Million)
      2. By Unit Sold (Thousand Units)
    2. Market Share and Analysis
      1. By Propulsion Type
      2. By Electric Powertrain Type
      3. By Hybridization
      4. By Vehicle Type
  11. Brazil Hybrid Electric Vehicle Market Outlook, 2018-2028F
    1. Market Size & Analysis
      1. By Revenues (USD Million)
      2. By Unit Sold (Thousand Units)
    2. Market Share and Analysis
      1. By Propulsion Type
      2. By Electric Powertrain Type
      3. By Hybridization
      4. By Vehicle Type
  12. Argentina Hybrid Electric Vehicle Market Outlook, 2018-2028F
    1. Market Size & Analysis
      1. By Revenues (USD Million)
      2. By Unit Sold (Thousand Units)
    2. Market Share and Analysis
      1. By Propulsion Type
      2. By Electric Powertrain Type
      3. By Hybridization
      4. By Vehicle Type
  13. Columbia Hybrid Electric Vehicle Market Outlook, 2018-2028F
    1. Market Size & Analysis
      1. By Revenues (USD Million)
      2. By Unit Sold (Thousand Units)
    2. Market Share and Analysis
      1. By Propulsion Type
      2. By Electric Powertrain Type
      3. By Hybridization
      4. By Vehicle Type
  14. Latin America Hybrid Electric Vehicle Market Key Strategic Imperatives for Success and Growth
  15. Competitive Outlook
    1. Competition Matrix
      1. Material Type Portfolio
      2. Brand Specialization
      3. Target Markets
      4. Target Material Types
      5. Research & Development
      6. Strategic Alliances
      7. Strategic Initiatives
    2. Company Profiles (Business Description, Material Type Segments, Business Segments, Financials, Strategic Alliances/ Partnerships, Future Plans)
      1. Hyundai Motor Company
      2. General Motors
      3. BYD Company Limited
      4. BMW AG
      5. Groupe Renault
      6. Volvo Group
      7. Nissan Motor Company Limited
      8. Ford Motor Company
      9. Toyota Motor Corporation
      10. Others
  16. Disclaimer
Latin America Hybrid Electric Vehicle Market - Segmentation Slide