Electric Three Wheelers Market

Market Overview

The global electric three wheelers market size was valued at USD 4.87 billion in 2022 and is projected to reach USD 12.15 billion by 2031, registering a CAGR of 10.7% during the forecast period (2023-2031). The demand for environmentally friendly automobiles drives the electric three wheelers market growth.

Electric three-wheelers, often known as e-rickshaws or electric trikes, are a type of electric vehicle (EV) having three wheels. These vehicles are generally used for short-distance urban transportation and are especially popular in densely populated Asian nations such as India, China, and Southeast Asia. Electric three-wheelers provide passenger and cargo transportation, providing an environmentally benign and energy-efficient alternative to gasoline or diesel-powered vehicles.

The market is predicted to expand due to the growing preference for electric vehicles over traditional vehicles fueled by fossil fuels. The increasing concentration of greenhouse gases in the atmosphere has prompted society to seek out environmentally friendly ways of transportation, particularly electric three-wheeler cars. Furthermore, new startups like Nobecars, Arcimoto, and others are thriving in the electric three-wheeler scene, expanding the Electric three wheelers market share.

Market Dynamics

Global Electric Three Wheelers Market Drivers

Government Initiatives and Incentives

Government assistance in the form of initiatives, incentives, and favorable regulatory regimes has been crucial in pushing the adoption of electric three-wheelers. To address environmental concerns and reduce greenhouse gas emissions, governments worldwide are actively pushing the usage of electric vehicles. In India, the government assists with the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) project. The Indian government promotes electric vehicles, particularly three-wheelers, through this project, which incentivizes manufacturers, customers, and other stakeholders. This phase focused on encouraging public and shared transportation electrification to support five lacks e-3 Wheelers through demand incentives by 2023. 

The Scheme also encourages the development of charging infrastructure. Buyers of electric three-wheelers in India can take advantage of government discounts and rebates of around Rs 15,000 in 2023. These subsidies cut the purchasing price for consumers, making electric three-wheelers more affordable. Furthermore, according to the Society of Indian Automobile Manufacturers (SIAM), electric three-wheeler sales in India have increased significantly in recent years. In April-March 2023, three-wheeler sales totaled 4,88,768 units. As a result, the electric three-wheeler market trend is projected to evolve in response to shifting government efforts and incentives.

Global Electric Three Wheelers Market Restraints:

Battery Technology and Range

The limitations of battery technology and the comparatively limited range of electric three-wheelers can be significant market restraints. While battery technology has advanced significantly, electric three-wheelers frequently experience range issues, which might limit their utility for particular customers and applications. While these cars are ideal for short-distance urban transportation, their range is generally limited due to the usage of smaller batteries. Many electric rickshaws in India range about 70-100 kilometers on a single charge, which may not be enough for some drivers who must travel longer distances daily. 

According to an International Council on Clean Transportation (ICCT) study, the restricted range of electric three-wheelers can be an issue, especially in high-usage areas. To be economically viable for taxi or commercial operations, these vehicles must often have a range that allows them to operate for an entire day without needing to be recharged frequently. Furthermore, extended range is especially important for electric cargo three-wheelers used for goods transportation. To achieve their regular delivery timetables, delivery drivers demand cars that can travel longer distances on a single charge.

Global Electric Three Wheelers Market Opportunity:

Urban Mobility Solutions

Electric three-wheelers provide practical, eco-friendly, and effective last-mile connectivity within crowded cities, providing an opportunity to address urban mobility difficulties. As cities become more densely populated, the demand for sustainable urban transportation solutions, particularly for short-distance commuting, presents considerable potential. In the Indian market, particularly in Delhi, electric three-wheelers are used as urban mobility alternatives. Electric rickshaws (e-rickshaws) have grown in popularity as a sustainable and cost-effective means of urban transportation. 

Furthermore, the usage of electric three-wheelers, notably electric cargo tricycles, has increased significantly in China. These trucks are commonly utilized for last-mile delivery in places such as Beijing and Shanghai. Electric cargo tricycles have been integrated into the delivery fleets of companies such as Alibaba's Cainiao Network and JD.com. China trailed India in electric three-wheeler sales, with roughly 3,500,000 units sold and in service by 2022, including electric three-wheelers. The Chinese government has actively promoted electric vehicles, including electric three-wheelers, for urban logistics. Countries demonstrate the global trend of employing electric three-wheelers for urban mobility solutions. They provide efficient and sustainable mobility alternatives to traditional gasoline-powered automobiles in densely populated urban areas.

Regional Analysis

The global electric three wheelers market analysis is conducted in North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

Asia-Pacific Dominates the Global Market

Asia-Pacific is the most significant global electric three wheelers market shareholder and is estimated to grow at a healthy CAGR over the forecast period. The region dominates the market due to the region's high demographic growth of a greater middle and lower-middle-class income population and increased propensity toward car electrification. Other kinds of transportation, in addition to four-wheelers, are electrified. Electric mobility has swiftly increased since its introduction, with shared electric-assist bicycles, electric scooters, and e-three-wheelers being available in numerous sections of this region. The highest market share is held by India, followed by China, Vietnam, and other developing countries.

Furthermore, the governments in the region are also taking steps to minimize pollution. For example, the government of India launched phase II of the FAME India plan in December 2019, which focuses on encouraging the electrification of public and shared transportation and aims to encourage e-buses and e-3 wheelers through incentives. Thailand's Energy Conservation Fund (ECF) has granted a THB 106 million incentive to encourage tuk-tuk operators to switch from liquefied petroleum gas (LPG) to electric vehicles. Several key regional competitors, such as Terra Motors, are launching numerous electric three-wheelers for passenger and cargo transportation in prospective markets such as India, Bangladesh, and Nepal to boost their market presence and share.

Europe is anticipated to exhibit an impressive healthy CAGR over the forecast period. The existence of important vehicle manufacturers who are aggressively investing in establishing an electric mobility portfolio is also predicted to drive market expansion in the European region. These companies also devote resources to researching and developing novel technology for electric transportation solutions. For example, the European Union has developed the EU-LIVE R&D program, sponsored by Horizon 2020, to develop mobility solutions and models for L-category cars. E-rickshaws manufacturers invest much in R&D to provide creative, technologically enhanced mobility solutions. Advanced automobiles in European countries are responsible for driving the European market forward. These measures are boosting market growth even more.

In addition, Germany has the largest market share due to the country's high demand for light-duty electric commercial vehicles. Furthermore, rising public knowledge of the national purchase incentive scheme and long-term government goals are shaping the bounds of the German electric three-wheeler industry. The German government declared in December 2019 that it intends to phase out the sale of gasoline-powered automobiles entirely by 2040.

The North American electric three-wheeler industry is expanding because of rising demand for pioneering advancements in electric three-wheelers. Because of the increased adoption of electric vehicles for business purposes, the United States dominates the North American electric three-wheeler industry. Several renowned manufacturers in the country are bringing various EV three-wheelers to future passenger and freight transportation markets to increase their market presence and revenue.

Segmental Analysis

The global electric three wheelers market is segmented based on vehicle type, battery type, power type, and region.

The market is further segmented by Vehicle type into Passenger and Load carriers.

Passenger Carrier holds the largest share of the market. The primary purpose of electric three-wheelers designed as passenger carriers is to transport passengers. These cars usually have seating layouts in the back with enough room for passengers. The increase in demand for three-wheelers as a public transportation option for daily and last-mile trips is related to the segment's growth. Public transportation is preferred over private commutes in emerging countries with a large density of middle-income population. Electric three-wheelers are developing as an environmentally friendly and cost-effective solution, fueling the market growth of electric three-wheeler passenger carriers.

Load carriers, often known as electric cargo three-wheelers or delivery vehicles, are vehicles used to convey goods and cargo. These cars usually have an open cargo compartment in the back that varies in size. Load carriers are widely utilized for last-mile delivery of goods, mostly by e-commerce, courier, and logistics firms.

Based on battery type, the market is sub-segmented into Lithium-ion and Lead Acid.

Lithium-ion is the most significant contributor to the market. Rechargeable lithium-ion batteries are noted for their great energy density and efficiency. They are widely utilized in various electric vehicles, including electric three-wheelers. Their popularity can be attributed to enhanced battery life due to increased energy density, compact size, shorter charging time, and less maintenance. The growing popularity of electric vehicles, hybrid electric vehicles, and plug-in hybrid vehicles has increased demand for lithium-ion batteries.

Lead-acid batteries, made of lead dioxide and sponge lead, are an older and more established battery technology. They are well-known for their dependability and affordable cost. Because of its capacity to generate a high-power surge, lead-acid batteries are commonly employed in EVs, establishing them as a dependable energy source.

The market can be further bifurcated by power type into Up to 1000 W, 1000 W to 1500 W, and Above 1500 W. 

1000 W to 1500 W leads the market. Electric three-wheelers with power ratings ranging from 1000 to 1500 watts provide a mid-level power level that balances efficiency and performance. These vehicles are adaptable and can be used for various purposes, including long-distance passenger transportation and light to moderate freight transportation. They are often utilized for taxis, shared rides, and local goods delivery. The market's need for high-powered electric three-wheeler vehicles increases the segment's rise. The instant torque produced by 1000W to 1500W motors improves vehicle efficiency and acceleration from the outset, making them a favorite choice among OEMs. 

High-powered vehicles are electric three-wheelers with power ratings of more than 1500 watts. This section is ideal for demanding applications like large cargo transport, long-distance passenger trips, and hilly terrains. Electric three-wheelers with high power provide improved performance, speed, and range.

Recent Developments

• April 2023- Omega Seiki Mobility (OSM) collaborates with cKers Finance to offer retail financing for electric three-wheelers.
• August 2023- Keto Motors and Saera Electric have announced a strategic alliance and the formation of the 'Saera Keto joint venture to become a prominent participant in India's electric three-wheeler (E3W) market.