The automotive industry is undergoing a significant transformation, with hybrid and electric vehicles (EVs) at the forefront of this change. The new energy vehicle (NEV) market is dynamic in nature and is poised for growth as economic conditions improve and technological innovations continue to emerge, says GlobalData, a leading data and analytics company.
According to GlobalData, the Battery Electric Vehicle (BEV) market in Europe and the Asia-Pacific (APAC) region experienced a period of stagnation in 2024; however, a robust rebound is projected for 2025.
Madhuchhanda Palit, Automotive Analyst at GlobalData, comments: “The positive outlook is supported by declining interest rates and the introduction of more competitive vehicle offerings. In particular, government policies in China, including the purchase tax exemption extension until 2027 for NEVs, are expected to invigorate the market, with BEVs poised to play a dominant role in both the short and long term.”
Moreover, recent upgrades to emission regulations, which impose stricter standards, will serve as significant catalysts for the adoption of NEVs. For example, India plans to implement the Corporate Average Fuel Economy (CAFE) phase 3 regulations in 2027 and phase 4 in 2032. These stringent fleet carbon dioxide (CO2) limitations will compel original equipment manufacturers (OEMs) to either enhance their internal combustion engine (ICE) powertrains or increase the sales of EVs within the passenger vehicle sector.
Additionally, significant policy changes, particularly in China, are influencing the market dynamics. The purchase tax exemption and the introduction of a dual-invoice system for swappable battery vehicles are expected to enhance the appeal of EVs.
Palit adds: “Government incentives, such as tax rebates and subsidies, play a crucial role in encouraging the adoption of EVs, as seen in the success stories of Norway and Denmark. In the US, the ongoing dilemma about policy change might create tricky and unfavorable conditions for domestic automakers and establish market dominance for Tesla.”
Technological advancements are pivotal in driving the market forward. Toyota‘s launch of the world’s first hydrogen hybrid vehicle and CATL’s unveiling of the “Freevoy” supercharging hybrid battery exemplify the industry’s commitment to innovation. These developments, along with the standardization of hybrid technology by automakers like Toyota and Honda, are making new energy vehicles more accessible and appealing to consumers. The expansion of charging infrastructure and government incentives further supports the growth, addressing range anxiety, and increasing overall awareness of the benefits of NEVs among consumers.
Palit concludes: “The future of hybrids and EVs looks bright, driven by a combination of favorable economic conditions, strategic policy changes, and breakthrough technological advancements. As the market share for ICEs declines, the rise of new energy vehicles is a testament to the industry’s adaptability to sustainable transportation solutions. Ongoing innovations in technology and infrastructure promise a greener and more efficient automotive landscape.”
