The global demand for hybrid-electric vehicles (HEVs) is projected to surge to 3.9 million units in 2015, followed by a doubling of that figure by 2020, according to "World Hybrid-Electric Vehicles," a new study from The Freedonia Group, Inc., an industry market research firm.
More HEVs will be entering the worldwide light vehicle market fueled by the increased demand for energy, which is responsible for erratic fuel prices and increased emissions regulations.
The cost differences between HEVs and conventional light vehicles, now at between $1,000 and $3,000, will decrease as production volumes grow, the study notes.
HEVs, which are considered to be fuel efficient and environmentally friendly vehicles, will continue to be most in demand in the Triad countries (the U.S., Western Europe and Japan), but demand in China is also expected to grow rapidly.
According to the research, the U.S. market will probably have the highest demand for HEVs, due to erratic fuel costs, the market's unique Corporate Average Fuel Economy requirements, and the lack of significant demand for light vehicle diesels beyond the full-size truck and sport utility vehicle categories.
Although HEVs are less cost-effective than internal combustion engine (ICE) vehicles, they have found a niche in the U.S. due to their a "carbon neutral" enabling technology. And even though the HEVs cost more, their unique styling and excellent fuel economy makes them popular with this niche market. Still, due to the unfavorable price/benefits levels, many manufacturers have failed to position HEVs as high performance alternatives to ICEs, the study concludes.
In Europe, where the demand for light vehicle diesel units is already at 50 percent of the market, growth is projected to be much lower than in the U.S.
The trend in Japan will be towards an increased demand for HEVs, especially as government agencies and allied associations continue to put tax and other incentives in place to stimulate demand.
The research shows that demand for HEVs in China and South Korea will also increase due to government interest in mobile emission curtailment (China), and because local production is planned (China and South Korea).
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