Increased focus on developing more fuel-efficient cars and trucks is putting pressure on vehicle manufacturers to make better, eco-friendly systems. In response, powertrains—the main power generating components of a vehicle, namely the engine and transmission—are going hybrid, with the Global Hybrid Powertrain Systems Market growing at a CAGR of 10.86 percent from 2014-2018. As these systems get more popular, more and more consumers are snapping up hybrids as eco-friendly alternatives to internal-combustion engines.
But while hybrids are definitely gaining in popularity, there are several pros and cons impacting the hybrid powertrain market.
Hybrid Powertrain Pros
Fuel Economy
It’s simple: An efficient transmission and powertrain system optimizes the engine’s output and ensures better fuel efficiency, meaning you ultimately spend less on gas.
Demand from automotive manufacturers and consumers alike has led to the rapid growth of hybrid powertrain systems worldwide, and key vendors like Allison Transmission, Bosch Group, Eaton Corp., and Siemens AG have introduced innovative technologies armed at reducing fuel consumption into the market.
Government Support
Governments worldwide have realized the importance of protecting the environment from harmful vehicle emissions, and legislation is being written to reduce said emissions. Recently modified regulations make it mandatory for all carmakers to follow new emission levels for all upcoming models, or pay fines for not adhering to the specified levels.
Many governments are even giving incentives to prospective electric vehicle buyers to promote market growth. For example, the Sustainable Energy Authority of Ireland (SEAI) provides grants of up to US$6,600 in addition to an exemption from vehicle registration tax. This widespread government support is becoming a major growth driver for the Global Hybrid Powertrain Systems Market.
Hybrid Systems Play Nice With Automatic Transmissions
While most Europeans scoff at the idea of an automatic transmission, the technology has proved to be a boon for the overall transmission industry, especially in emerging economies such as China, Brazil, and India.
OEMs are increasingly catering to this heightened demand by producing more and more automatics, which is good news for the hybrid powertrain market, as these systems tend to work well with automatic transmissions.
Hybrid Powertrain Cons
Battery Issues
The battery is the lifeline of hybrids, plug-in hybrids, and electric vehicles, and battery costs contribute substantially to the costs incurred in the production of these vehicles. Earlier versions of micro electric vehicles had lead-acid batteries, which have since been replaced with li-ion ones because of the harmful environmental effects and lower efficiencies of lead-acid batteries. The downside is that lithium-ion batteries cost more, which increases the total cost of the vehicle.
High Upfront Costs
The powertrain system is one of the most important components of a vehicle, and accounts for around 20 percent of the entire vehicle cost. The cost of components, as well as design and quality control tests can significantly add to the overall cost of an entire powertrain system, and OEMs are facing the daunting task of maintaining profitability in this area.
Even for aftermarket, the cost of replacing hybrid powertrain systems and components is substantially higher compared to replacing components of conventional powertrain systems. This high cost is proving to be a major challenge for all levels in the hybrid powertrain market.
Suitability for Different Applications
Hybrid powertrain systems are manufactured according to the size, technology, and applicability of the vehicle. This means the same hybrid powertrain system cannot be used in all vehicles, and automakers building a variety of vehicles have to tackle the costs associated with different types of hybrid powertrain systems. The low suitability of hybrid powertrain systems is becoming one of the major challenges for this market, and has substantially impeded market growth.
