Mild Hybrid Electric Vehicle (MHEV) Market Size

Mild Hybrid Electric Vehicle Market Size

Mild Hybrid Electric Vehicle Market size was valued at USD 103.5 billion in 2023 and is estimated to register a CAGR of over 17.5% between 2024 and 2032, fueled by the increasing number of product launches from leading companies. As automotive manufacturers strive to meet stringent emissions regulations and consumer demand for more fuel-efficient vehicles, MHEVs have emerged as a popular choice. For instance, in March 2023, the latest iteration of the Mercedes-Benz G-Class introduced new mild-hybrid engines. The 2025 model underwent various enhancements, including the SUV receiving a power boost thanks to the integration of mild-hybrid technology.

These vehicles offer a cost-effective solution by incorporating mild hybrid technology, which includes features like start-stop functionality and regenerative braking. With major players consistently introducing new models equipped with MHEV systems, consumers have a wider range of options to choose from. Additionally, incentives and subsidies offered by governments to promote eco-friendly transportation further fuel the demand for MHEVs, driving market growth and innovation in the automotive industry.

The mild hybrid electric vehicle (MHEV) market is experiencing a surge in demand due to the expanding product introductions by companies venturing into new regions. As automotive manufacturers seek to address global concerns about emissions and fuel efficiency, they are increasingly expanding their product offerings of mild hybrid electric vehicles into previously untapped markets. By introducing MHEVs in new regions, automakers aim to cater to diverse consumer preferences and regulatory requirements worldwide.
 

As a result, the market for mild hybrid electric vehicles market is witnessing significant growth fueled by the expansion of product introductions into new regions. For instance, in November 2023, after successful prototype testing in Africa, Toyota launched a mild-hybrid variant of the Hilux in the European market. The goal was to enhance both fuel efficiency and driving performance, offering consumers in the region an upgraded and environmentally conscious option.
 

Fluctuating fuel prices and the uncertainty surrounding traditional fossil fuel reserves drive consumers to seek more fuel-efficient alternatives. MHEVs offer a solution by combining electric propulsion with conventional internal combustion engines, resulting in reduced fuel consumption. As fuel prices continue to rise, consumers are increasingly drawn to MHEVs for their cost-saving benefits over the long term. This factor contributes significantly to the growing demand for hybrid electric vehicles across various market segments.
 

While the MHEV market shows promising growth, several restraints hinder its full potential. The higher upfront cost of MHEVs than traditional vehicles deters some consumers despite potential long-term savings. Besides, limited charging infrastructure for plug-in hybrid variants may hinder adoption rates, especially in regions with inadequate infrastructure. Thirdly, concerns about battery lifespan and maintenance costs pose challenges, potentially impacting consumer confidence.
 

Moreover, technological limitations, such as range anxiety for electric modes and performance trade-offs in hybrid systems, may deter some buyers. Addressing these restraints through innovation, infrastructure development, and consumer education is crucial for maximizing the market potential of mild hybrid electric vehicles.