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Industry Themes
Industry Themes
22 December 2025
By Jie Sun
Hybrid buses and trucks face declining long-term prospects in Europe as BEVs gain scale, driven by EU emissions targets, incentives, and charging availability.
The European Union's CO2 reduction targets for heavy-duty vehicles (HDVs) are driving a shift away from traditional internal combustion engines in the European commercial vehicle market. These targets for HDV automakers include a 90% CO2 reduction from 2019 to 2040 and, for city buses, a complete phase-out of fossil-fueled vehicle sales by 2035.
While battery-electric vehicles (BEVs) are a major focus of decarbonization efforts, hybrid technology plays a complex and evolving role as well. Even as manufacturers appear to be backing off hybrid buses, distinct real-world demands on the technology have ensured ongoing interest in hybrids for goods transportation.
In the >6T bus market, hybrids have been a popular transitional technology in the past decade. However, their market share in Western and Central Europe declined to about 8% in 2024 from a peak of 10% in 2023, as the market increasingly favors BEVs. BEVs now account for more than 25% of new bus registrations.
This shift from hybrid buses to BEVs is driven by maturing electric technology and EU zero-emission mandates for urban buses, leading manufacturers like Mercedes-Benz and Volvo to prioritize BEVs.
It is important to note that BEV uptake, for both trucks and buses, is strongly influenced by government targets and incentives; for example, the Netherlands has accelerated the adoption of electric buses through its requirement that all new public-transport buses operate on renewable energy from 2025, in advance of a full zero-emission mandate by 2030.
S&P Global Mobility's 7-year commercial vehicle forecast, focused on engine production and covering 43 countries, offers critical insights into the current and projected engine market. Use our forecast to understand the future of electric commercial vehicles, assess OEM demand for engine parts, competitors’ powertrain lineups, and much more.
The heavy-duty truck market presents a more nuanced picture. While sales of electric trucks are growing in some segments, challenges like battery size, weight, cost, and charging infrastructure limit their adoption for long-haul routes. Despite these challenges, major manufacturers are still taking a "BEV-first" approach, investing heavily in electric trucks.
Hybrid trucks are also being explored, although there has been limited adoption of hybrids in the European market to date. For example, Scania and DHL began testing a hybrid electric truck with a fuel-powered generator for long-haul logistics in February 2025, addressing current infrastructure limitations.
Efforts in the truck space have shifted, noticeably, from promotion of mild hybrids to full hybrids since 2020. This shift stands in contrast to the BEV-focused bus market, even though absolute volumes still remain much lower for hybrid trucks compared to hybrid buses.
Ultimately, the EU's long-term targets point toward a zero-emission market, where the total carbon output (TCO) advantage of BEVs will reduce the appeal of hybrids and other combustion-engine alternatives. We expect this shift definitively toward BEVs to happen in the 2030s for some vocations.
In the bus sector, hybrid buses are likely to approach obsolescence due to policy mandates and favorable BEV economics. In the truck sector, hybrids may serve as a complementary transitional option, particularly if high-power charging infrastructure for long-haul vehicles develops slowly.
Nevertheless, total hybrid commercial vehicles uptake across Europe is expected to remain limited, constrained by accelerating BEV adoption, regulatory pressure, and minimal dedicated incentives for hybrids.
S&P Global Mobility's 7-year commercial vehicle forecast, focused on engine production and covering 43 countries, offers critical insights into the current and projected engine market. Use our forecast to understand the future of electric commercial vehicles, assess OEM demand for engine parts, competitors’ powertrain lineups, and much more.
This article was published by S&P Global Mobility and not by S&P Global Ratings, which is a separately managed division of S&P Global.