Worldwide: The global alternative fuel and hybrid vehicle (AFHV) market is expected to reach a value of US$614 billion by 2022, registering a CAGR of 12.9 percent from 2016 to 2022, according to market intelligence company Allied Market Research.
Non-conventional fuels such as biofuels like ethanol are used to power AFHVs. The adoption of AFHVs across the world is due to the rapid decrease in oil reserves as well as the need to leave a smaller environmental footprint.
These vehicles produce less carbon related compounds—such as oxides of carbon, nitrogen, and sulphur—making them an eco-friendly alternative in the automobile industry. Electric vehicles (EV) use electricity as their power source which is stored in vehicular batteries, and are capable of recharging at charging outlets. Hybrid vehicles use both conventional as well as alternative fuels as sources of power along with electric drives.
The factors driving the AFHV market include stringent government laws and regulations toward vehicle emission, an increase in public charging infrastructure, and increased demand for fuel-efficient vehicles. Other market drivers are the technological advancements in alternative fuel vehicles as well as government initiatives that encourage investments in electric vehicles.
On the basis of vehicle type, passenger cars are leading the market with automobiles such as battery electric vehicles (BEV), hybrid electric vehicles (HEV), and alternative fuel passenger cars. Currently, there are around 358,000 BEVs and 242,000 PHEVs running across the globe. The number of electric passenger cars is expected to reach 450 million units by 2040.
China is a huge potential market for AFHVs. According to the Global EV Outlook 2015, China held 230 million e-bikes, 83,000 e-cars and 36,500 e-buses.
Asia Pacific is expected to be the most profitable region with opportunities aplenty for automakers. The region’s market growth is supplemented by stricter vehicle emission norms formulated by the European Union and emission control organisations in North America, and automakers offering their vehicles in the region.