Three-Wheeler Market

Market Overview

The global three-wheeler market size was valued at USD 10.21 billion in 2024. It is expected to reach USD 22.46 billion in 2032, growing at a CAGR of 10.36% over the forecast period (2024-32). As urbanization accelerates, especially in developing countries, the demand for efficient and compact modes of transportation increases. Three-wheelers are an ideal solution for navigating congested city streets due to their small size, maneuverability, and ability to weave through traffic. This makes them a popular choice for both passengers and goods transportation in densely populated urban areas.

A vehicle having three wheels is known as a three-wheeler. A few are motorized tricycles, which may be legally classified as motorbikes, but others are unpowered tricycles, some of which are human-powered and animal-powered. Three-wheelers are typically employed as commercial transportation for both people and cargo. Mobility on three wheels depends on maneuverability, cost, and door-to-door delivery. Three-wheelers best meet the need because they are faster and substantially less expensive than other public and goods transit options in many developing nations, particularly in Asia-Pacific and LAMEA.

The three-wheelers market is driven by elements, including the rise in the need for reasonably priced commercial vehicles, the need for electric passenger and load carriers, and the low maintenance and production costs. The three-wheeler market growth is anticipated to be constrained by the rising trend toward last-mile delivery, shared mobility, and fuel prices.

Market Dynamics

Market Drivers

The Adoption of Electric Three-Wheelers and Trend of Last Mile Connectivity

Since a few years ago, one of the top worries for governments and environmentalists has been the steadily rising global carbon emissions caused by the use of fuel. This consequently increases the demand for electric three-wheelers worldwide, supporting the market's expansion. Additionally, the international adoption of electric three-wheelers has grown due to the rise in worldwide fuel prices, pollution, and traffic congestion, particularly in urban areas.

To surpass Uber, the taxi industry giant Ola introduced an entire fleet of Bajaj and Piaggio autorickshaws in the Liverpool area in March 2019. In addition, the relatively higher operating and maintenance costs of petrol/CNG & diesel propelled three-wheelers lead to a shift in preference for electric three-wheelers for shorter transits, which drives the market growth. Since three-wheelers provide outstanding agility at a reasonable price, many businesses in the e-commerce, pharmaceutical, textile, retail, FMCG, and other utility categories, including dairy, poultry, and gas, prefer them as a last-mile connection solution.

For instance, an Indian business uses electric three-wheelers to deliver goods to e-commerce and food tech companies like Amazon, Swiggy, and Bigbasket. Additionally, due to their additional advantages, governments in several nations are eager to switch their last-mile delivery fleet to electric. The Delhi Metro, for instance, introduced electric vehicles in 2018 to improve last-mile connectivity for metro stations. The demand for electric three-wheelers is increasing due to the increased use of electric cars, which are more cost-effective than traditional three-wheelers in terms of overall maintenance and running costs. Many top firms are working to reduce the upfront cost of electric three-wheelers by efficiently integrating advanced technology, design, and workflow. This also anticipates the desire for three-wheelers as the last-mile connectivity solution.

Market Restraints

The rise in Fuel Cost

The price of fuel has increased significantly during the last ten years. Crude oil prices are rising, which is primarily controlled by the Organization of the Petroleum Exporting Countries, and this is what is causing the majority of the increase in fuel prices. Furthermore, it is projected that prices will rise soon due to the restricted supply of crude oil. However, there are still several nations where the cost of fuel is only slightly rising, including Germany, China, and Denmark.

However, as global activity grows, it is anticipated that prices will rise as well. In such a situation, increasing taxes will cause prices to rise more rapidly with each upward adjustment. The petrol/CNG and diesel three-wheeler are expected to suffer soon due to these price increases. However, rising gasoline costs subtly push end users toward three-wheel electric vehicles.

Market Opportunities

The trend of Shared Mobility

Shared mobility services lessen traffic in urban areas and reduce overall car emissions. As a result, digitally enabled ride-hailing and car sharing efficiently manage transportation needs while offering a convenient and sustainable alternative to owning a private vehicle. A single mobile app can manage this sharing and ride-hailing activity, which covers the complete process from journey planning to payments. Because they eliminate manual labor and cut down on total time and expense, ride-hailing services are expected to play a significant role in this market in the years to come. The demand for three-wheelers is expected to continue growing due to this trend.

Regional Analysis

The region-wise segmentation of the global three-wheeler market includes North America, Europe, Asia-Pacific, and LAMEA.

The Asia Pacific will likely command the regional market while developing at a CAGR of 10.75%. Some of the driving aspects for the growth of the three-wheeler market in this region include an increase in demand for affordable commercial vehicles with low production costs, an increase in production capacity, and an increase in demand for simple light cars. Automakers are actively designing innovative goods to suit consumer expectations in this region. The three-wheeler market share is expected to rise due to rising auto sales and rapid industrialization.

As a result of its low weight, environmental friendliness, need for less electricity, and affordability, electric three-wheelers are becoming more popular in the Asia-Pacific region than traditional three-wheelers. Additionally, the region's demand for electric three-wheelers is expected to expand due to initiatives for environmentally friendly cars and the development of relevant infrastructure from numerous governments, including India. China has strengthened its industry by turning a profit on the supply side of three-wheeler present and forecast output. The region is moving more toward electric mobility, which is anticipated to support the growth of the market for electric three-wheelers on both the supply and demand sides.

Europe is predicted to advance at a CAGR of 9.73% and hold USD 5,212 million. In Europe, electric three-wheelers are growing because of their popularity as recreational vehicles and excellent maneuverability. The European Government and environmental authorities are also passing strict emission rules and laws in response to growing environmental concerns, increasing demand for electric three-wheelers in Europe. For the next stage of the Kyoto Protocol, the European Union (EU) agreed to reduce greenhouse gas emissions by 20% in 2020. The EU hopes to reach its goal of 0% greenhouse gas emissions by 2050.

Additionally, many taxi businesses are replacing their fleet with electric three-wheelers. For instance, to surpass Uber, the taxi company Ola introduced an entire fleet of autorickshaws made by Bajaj and Piaggio in the Liverpool area in March 2019. Further, plans call for these activities to strengthen the region's three-wheeler demand. France is among the most significant countries to invest in, especially for automakers and their suppliers. A good infrastructure and government expenditures create a profitable potential for the expansion of the three-wheeler sector in France, which already accounts for 20% of all light cars manufactured in Europe and is projected to generate nearly half as many vehicles yearly as the US.

Segmental Analysis

The global three-wheeler market is analyzed across the fuel and vehicle.

The fuel type categories include petrol/CNG, diesel, and electric.

The diesel section is envisioned to expand at a CAGR of 7.66% and hold the largest market share. Diesel is used in internal combustion and compression ignition engines that power diesel three-wheelers. Diesel engines are ideal for both passenger and load carrier three-wheelers since they produce considerably more power and are more efficient than petrol/CNG engines. The power of a diesel three-wheeler is greater, but diesel engines have far more particulate matter than their petrol/CNG counterparts. A diesel three-wheeler emits about 6 times as much particulate matter and twice as much nitrogen oxide as a BSVI diesel automobile, even after BSVI emission rules are in place. However, several aspects drive the demand for diesel three-wheelers, including their higher power output, better-operating costs, affordability, and outstanding maneuverability.

The petrol/CNG section will hold the second-largest market share. Internal combustion spark ignition engines employ gasoline or compressed natural gas (CNG) as fuel to power petrol/CNG three-wheelers. Due to their reasonable power production and respectable efficiency, gasoline and compressed natural gas are primarily employed in passenger vehicles. The growth of petrol/CNG three-wheelers is aided by several factors, including their ease of customization, lower manufacturing costs than diesel engines and the flexibility to restore existing cars using CNG kits. While governments in many developing nations are pushing for electric mobility in the commercial vehicle sector, the long-term growth of petrol/CNG three-wheelers is anticipated to be constrained by this trend.

Per the vehicle type, the categories include passenger and load carriers.

The load carrier section will grow at a CAGR of 11.44% and hold the largest share. A load carrier comprises a sheet-metal body or open frame on three wheels, a canvas roof with dropped side curtains, and a small cabin with driving controls up front for the driver. The only distinction is that a freight carrier lacks a passenger cabin. Lightweight cargo can be transported within cities using three-wheeled load carriers. Furthermore, its demand, particularly in Asia-Pacific, is driven by its low upfront cost and excellent cost-to-performance ratio. The load carrier category also propels the growth of the global three-wheeler market during the forecast period due to the expansion of the e-commerce industry and last-mile connectivity.

The passenger carrier section will hold the second-largest share. A passenger carrier is a three-wheeled vehicle used by passengers to go short distances. Passenger vehicles can be propelled by diesel, electricity, or gasoline/CNG. There is room for three to five people to sit there. These carriers typically consist of a sheet-metal body or open frame supported by three wheels, a canvas roof with drop-down side curtains, and a small cabin with driving controls up front for the driver. Three-wheelers are favored because they are typically less expensive than other vehicles. These passenger carriers give exceptional agility even on the challenging route. Additionally, three-wheelers are popular among both users and owners due to their small size, short turning radius, flexibility of operation, and affordable running costs. As a result, it has helped low- to middle-income countries create jobs and promote affordable transportation. As a result, a significant increase for passenger carriers is anticipated during the predicted period.

Recent Developments

• March 2024 - Tanzania marked the introduction of TRí's next-generation electric three-wheeler. In Tanzania, three-wheelers with internal combustion engines are a common form of transportation. Tanzania is home to an estimated 250,000 ICE three-wheelers, and TRí aims to spearhead the sector's electric transition. Last year, TRí commenced its commercial operations following extensive research into the most suitable 3-wheeler type for this particular market, environment, and use case.
• April 2024 - The International Energy Agency (IEA) stated that with over 580,000 sales in 2023, India overtook China as the world's largest market for electric three-wheelers. According to the IEA, India surpassed China in 2023 to become the largest market for electric 3Ws, with over 580,000 sales. This indicates that India has quickly adopted electric cars in response to rising domestic demand and encouraging government initiatives.