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This market will see steady growth over the next eight years, according to ABI Research.
Hybrid vehicles have been on the market for many years now, but 2011 was significant for the introduction of the first plug-in and all-electric consumer vehicles from major manufacturers, along with promises of more in 2012. While this will not lead to a major shift away from conventionally powered vehicles, this market will see steady growth over the next eight years, according to ABI Research.
"More competition is always good for sales, and as these vehicles become better known as mainstream products, both production efficiencies and consumer demand will improve," says principal analyst David Alexander. "However, gasoline and diesel engine technology is not standing still, and more efficient conventional solutions will not make it easier for HEV producers."
Government incentives and increasingly stringent emissions regulations will continue to drive the adoption of hybrid and electric vehicles. In particular, major cities are providing a great deal of support for electric and plug-in hybrid vehicles by subsidizing the installation of public recharging infrastructure and offering discounted or free parking and other benefits.
"Fuel cost has a major part to play in the growth of the HEV market," says group director Dominique Bonte. "Initial purchase cost remains a barrier to large sales numbers, but if fuel cost was to rise significantly, then the payback period would get much shorter and demand would rise. Note that if this happens in the short term, there might be issues ramping up production."
Commercial hybrid and electric vehicles continue to be tested in fleets, and there is a much greater variety of technology available, including hydraulic energy storage systems that are better suited to large, heavy vehicles, according to ABI. ABI believes there is no solution that meets all needs, and each technology must be evaluated in terms of the drive cycle required.