Report Overview

India Electric Three-Wheeler – Industry Trends & Forecast Report 2027

India electric three-wheeler market has reached USD 636.9 million in 2020 and is anticipated to reach USD 1,845.1 million by 2027, at a CAGR of 16.3%, during the forecast period (2021-2027). The growing concern over air pollution is pushing the automobile industry to reduce its carbon footprint, bolstering the need for electric three-wheelers in the market. Additionally, the market is primarily driven by strict emission norms/regulations, government incentives, and increasing environmental awareness. Moreover, consistently increasing affordability of electric three-wheelers is boosting their adoption across the country, propelling the Indian electric three-wheeler market even further.

Source: BlueWeave Consulting

India Electric Three-Wheeler Overview

An electric three-wheeler comes with an electric motor instead of an internal combustion engine (ICE). It generates power by burning a mixture of fuel and gases. One of the most unique features of electric three-wheelers is that they can be plugged in by the driver to charge from an off-board electrical power source. This property differentiates electric three-wheelers from hybrid electric vehicles, which have an internal combustion engine and an electric motor that consumes energy contained in batteries. Electric three-wheelers are mainly used for public transportation such as e-rickshaw and auto service in the city.

India Electric Three-Wheeler Forecast and Trend

Growth Drivers

Growing Concerns Over Environmental Pollution

The Environmental Performance Index (EPI) 2018 ranks India among the bottom five nations. As far as air quality is concerned, India’s CO2 emissions rate is increasing every year owing to the emission of toxic gases by fuel-based vehicles. Therefore, the Government of India is now focusing more on EVs such as three-wheeler vehicles and introducing policies such as FAME 1 and FAME 2. These initiatives would help improve air quality besides favoring the market during the forecast period. A study conducted by TERI (The Energy and Resources Institute) in 2018 revealed that average traditional LPG auto emits around 0.005 tons of Particulate Matter-10 (PM10) and 3.72 tons of carbon dioxide per year.Electric auto-rickshaws (e-autos), on the other hand, emit zero tailpipe emission and make no noise while meeting people's transportation needs. Furthermore, the fact that an electric three-wheeler has lower maintenance and running costs then an internal combustion engine vehicle is likely to propel the growth of the industry in the coming years.

Government Initiatives to Drive the Market Growth

The government of India has been responsive in recognizing the need for transitioning to electric mobility and has developed policies and schemes to direct growth in this direction on numerous occasions. Such policies and programs emphasize the importance of electric three-wheelers in achieving last-mile connectivity. The Indian electric three-wheeler market is growing rapidly as a result of government funding and incentives under the country's "FAME India" schemes, which encourage the faster adoption of electric three-wheelers.

Apart from the measures at the national level, several state governments are also committed to promoting electric three-wheelers in their states to drive market growth. For example, the Maharashtra Electric Vehicle Policy aims to offer a subsidy of up to INR 12,000 for the purchase of electric-three wheelers. Additionally, Andhra Pradesh Electric Mobility Policy 2018proposes policy measures such as waiving registration and road tax on the sale of EVs, as well as tendering three-wheeler fleet licenses to businesses owing to which people are buying electric-three-wheelers, thereby driving the market growth.

Restraints

Lack of Standardization of Charging Infrastructure

One of the biggest restraints for the success of deploying the electric vehicle three-wheeler market in India is the lack of adequate charging infrastructure. India’s EV charging infrastructure is still at a nascent stage at present and has yet to catch up to meet the country's needs. This particular factor is severely hampering the acceptance of EVs in India. Proposing land is a major challenge in any metro city as charging stations need reserved space not just for the setup, but also for parking spaces so that multiple vehicles can park and use the charging station. This is yet another factor that is hindering the growth of the electric three-wheeler vehicle market in India.

Impact of COVID-19

The COVID-19 pandemic has posed a significant threat to India's electric three-wheeler market as the production of electric two-wheelers have been hampered as a result of the lockdown. For a market that is trying to strengthen its position in the industry, COVID 19 came as a severe blow.

However, in comparison to their ICE counterparts, the Indian electric three-wheeler market is likely to recover quickly from the setback. Investing in an electric three-wheeler is likely to aid in the preservation of air quality and the reduction of health risks in communities. Recently, the “Switch Delhi’ campaign was launched by Delhi’s Chief Minister, Mr. Arvind Kejriwal for promoting electric vehicles in the city. The campaign has gained widespread support and praise from environmentalists, consumers, celebrities, and business leaders. Additionally, after the implementation of the Delhi EV policy in August 2020, three-wheelers have become the most common EV segment in the city. There have been 5534 new EV three-wheeler registrations, with more users coming forward to make the switch.

India Electric Three-WheelerVehicle Market: By Battery

Based on battery, the Indian electronic three-wheeler market is categorized as a lead-acid battery, lithium-ion-battery, and nickel-metal hybrid battery. Lithium-ion batteries have the highest market share because they are lightweight, have improved protection, and are chemically and thermally stable. Additionally, they are more reliable and are capable of fast charging. Because of these advantages, electric two-wheeler manufactures are widely adopting lithium-ion batteries in electric three-wheelers, which in turn is driving the growth of the lithium-ion battery in this segment. Furthermore, lithium-ion batteries can last up to 10 years or longer, based on how well they are maintained, attracting customers to purchase electric two-wheelers besides fueling market development.

Furthermore, most lithium-ion batteries are 95% more powerful, which means 95% or more of the energy contained in the battery can be utilized. Lead-acid batteries, on the other hand, have efficiencies of about 80 to 85%. High-quality batteries charge faster and more efficiently, resulting in a greater effective battery capacity, which is equal to the depth of discharge.

India Electric Three-Wheeler Vehicle Market: By Vehicle Type

Based on the vehicle type, the India electric three-wheeler is segmented into passenger carriers and load carriers.  Passenger carriers include auto-rickshaws and carriers. These are largely used in rural areas as well as towns and cities. The auto-rickshaws and carriers are mainly used for traveling distances that cannot be covered by walking or cycling. Increasing demand for motorized transportation in public transportation systems is surging the growth of passenger carriers.

The load carrier segment in the electric three-wheeler market is likely to witness significant growth during the forecast period. Load carriers are mainly small vans or trucks that are used for carrying small-scale industrial loads from one place to another. These are mostly used in the industrial and commercial sectors. Rapid industrialization is one major reason that is driving the growth of load carriers.

India Electric Three-Wheeler Market: Regional Analysis

India electric three-wheeler market is segmented in Eastern India, Northern India, Southern India, and Western India. Southern India accounts for the highest share and is expected to be the largest and fastest-growing market as many automotive industries are setting up their manufacturing units in this region. Bangalore, known as the Silicon Valley of India, is home to many startups. This is due to the friendly rules and regulations set up by the Government of Southern India, which encourages different manufacturers to set up their manufacturing units, thereby boosting the demand for electric three-wheelers in Southern India.

Competitive Landscape

The leading players in the Indian electric-three wheeler include- Lohia Auto Industries, Saera Electric Auto Pvt. Ltd, Kinetic Green Energy & Power Solutions Ltd., Terra Motors India Corp, Clean Motion, Mahindra Electric Mobility Limited, Omega Seiki Pvt. Ltd., ATUL Auto Limited, Piaggio, Mayuri E-Rickshaw, and other prominent players. The India electric three-wheeler market is consolidated in nature. The rise in government initiatives and programs for providing subsidies has led to the rising demand for electric three-wheelers. In terms of competition, many new players are expected to enter the market in the coming years as the electric three-wheeler market is emerging rapidly. Moreover, the market participants are focusing on improving their services to attain a competitive edge over other players.

Recent Development

• In February 2021, Amazon India announced its partnership with Mahindra Electric to further strengthen its commitment towards electric mobility in the country. In 2020, Amazon India announced that its fleet of delivery vehicles will include 10,000 electric vehicles (EVs) by 2025 in India. These EVs are in addition to the global commitment of 100,000 electric vehicles in the delivery fleet by 2030 announced in the Climate Pledge signed by Amazon. This partnership with Mahindra Electric is an important step towards India’s progress in the e-mobility industry to achieve its environmental sustainability goals.

• In October 2020, Mahindra Electric Mobility Ltd., announced the launch of its latest electric 3-wheeler cargo model, Treo Zor in India starting at INR 2.73 lakh. The Treo Zor is based on the proven Treoplatform and will be available in three variants – Pickup, Delivery Van, and Flat Bed.

Scope of the Report

By Vehicle Type

• Passenger Carrier
• Load Carrier

By Battery Type

• Lead Acid Battery
• Lithium-ion Battery
• Nickel Metal Hydride Battery

By Battery Capacity

• <101Ah
• >101Ah

By Range

• Less Than 50 Miles
• 50–100 Miles
• Above 100 Miles

By Region

• Northern
• Eastern
• Western
• Southern