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The global electric three wheeler market size was USD 574.96 million in 2020. The global impact of the COVID-19 outbreak has been unprecedented and staggering, with electric three wheelers witnessing a negative impact on demand across all regions amid the pandemic. Based on our analysis and industry forecast, the global market will exhibit a lower growth of 0.4% in 2020 than the average year-on-year growth during 2017-2019. The market is projected to grow from USD 582.46 million in 2021 to USD 831.10 million in 2028 at a CAGR of 5.2% in 2021-2028. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
An electric three wheeler, also known as an electric rickshaw or e-rickshaw, is an electrically motorized three-wheeler used for carrying passengers and other utilities. It comprises a rechargeable battery that is used for powering the electric motor of the vehicle. An electric bike is majorly considered as a public form of urban and suburban transport. In addition, modern three-wheelers have plug-in charging options, while in the early days, batteries were charged after being removed from the vehicle.
Electric three wheeler scooter attained popularity post-2012. They have now become a viable substitute for gasoline-powered and pedal-powered vehicles. Compared to the traditional three-wheelers, the average operation and maintenance costs of an electric three wheeler are substantially low. Thus, positioned as an economical means of intermediate public transport for short and medium distances, the three-wheeler is generally regarded as a low-budget vehicle amongst the other electric vehicles on account of its universal appeal.
Market to Show a Momentary Downfall amid COVID-19 Pandemic
China contributes more than 75% of the global lithium manufacturing capacity, and its reserves are 30 times more than that of the U.S. reserves. The raging COVID-19 impact across the world has resulted in a severe lithium supply shortage for electric vehicle manufacturers dependent on China for lithium cells and other raw supplies. The pandemic-induced lockdown is expected to reduce the production of lithium ion batteries, which may consequently affect the growth of the electric vehicle market across the globe. Also, the prices of lithium hydroxide used in electric vehicles have increased substantially, thus causing difficulties in logistics and greater manufacturing costs. The sales of electric vehicles are impacted severely due to the lockdown.
Besides this, the EV business is not viable as of today as the technology is still developing. The cost of lithium ion batteries has to come down for the EV market to rise significantly over the upcoming years. Also, as companies are focusing on restoring their existing businesses, the new investments will temporarily retreat at the back seat.
Diego Graffi, CEO and MD of Piaggio Vehicles Pvt. Ltd., stated that the company would significantly downscale the original production strategies of manufacturing up to 5,000 e- three-wheelers this year. He also confessed that the EV adoption by the company will see a delay for a few months but will eventually take off soon.
However, in the next phase, the EV segment may grow faster due to the increasing awareness of the green environment and the inclination towards cleaner technologies. In India, the main focus of EV automakers is towards mass mobility and last-mile connectivity.
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E-Three-Wheeler to Become a Game Changer in Several Countries over the Next Three Years
The growing inclination of people towards a sustainable mode of transportation over conventional vehicles is rapidly boosting the concept of electrification of vehicles across the globe. Since its inception, the automobile sector has always been a flashpoint for developing advanced technologies, social innovation, and the economy. It has largely contributed to the human inventions that changed the lifestyle of humans. E-3W with a higher guaranteed utilization rate is a more profitable prospect for enterprises because as the utilization rate increases, they become cheaper to operate per kilometer. This has been recognized by large market players in the automotive industries.
For instance, in September 2020, Amazon announced its plan to add 10,000 E- three-wheelers to India’s delivery fleet by the end of 2025. Similarly, retail conglomerates, including Flipkart, Grofers, Big Basket, and furnishing giant IKEA, progressively rely on these vehicles to provide economic and clean last-mile delivery services. Thus, the widespread adoption of electrically powered vehicles in several countries is creating a larger scope for non-polluting electrically operated three-wheelers across the globe.
Increased Government Initiatives and Subsidies to Promote E-Mobility to Drive Growth
Globally, the emission of fuels from conventional vehicles leads to a high amount of carbon dioxide in the air, thereby leading to air pollution and global warming. Thus, automotive manufacturing companies and governments are investing a high percentage in developing and promoting the electrification of vehicles. Also, several governments and organizations have launched various subsidy schemes and initiatives to encourage buyers to prefer electric propulsion typed three-wheelers over traditional vehicles.
For instance, in order to promote the development of environmentally friendly vehicles, the Indian government launched the "Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India (FAME India)" in 2015. This scheme offers monetary incentives for the purchase of electric and hybrid electric vehicles. The first phase of the plan had offered subsidies for the purchase of eight electric three wheelers, L5 category1, ranging from INR 25,000 to INR 61,000 (USD 334- USD 813).
However, in the second FAME phase, a fixed subsidy of INR 10,000 per kilowatt-hour was subsidized to support five lakh electric three wheelers. Such initiatives are projected to promote the integration of E- three-wheelers, which may facilitate the shift from fossil fuel-based mobility to electric mobility, driving the market's growth in the forecast period.
Rising Preference for Electric Vehicles over Fossil Fuel Vehicles to Spur Demand
The rising awareness of vehicular emissions and their environmental problems has significantly promoted society's preference towards electric vehicles, especially for public transportation. Various countries worldwide with large populations having low to middle-income levels have a high rate of three-wheelers usage, traditionally propelled by IC engines.
However, many of these IC engine three-wheelers have become old and inefficient, emitting a large amount of particulate matter and Carbon Dioxide. Electric propulsion based three-wheeler manufacturers have identified the key market potential. They have increased their expenditure on R&D of E- three-wheelers to consolidate their positions among key players in the electric three wheelers market. For instance, according to the study of Crisil Research, 43% to 48% of new three-wheelers in India will be electric vehicles by the end of 2024.
Higher Cost and Lack of Standardization of Charging Infrastructure May Hamper Growth
The cost of three-wheeler electric vehicles are significantly high compared to fossil fuel-powered three-wheelers owing to the high cost of batteries. Therefore, the middle and lower-middle-class consumers in developing countries are still more inclined towards conventional fuel vehicles. Thus, replacing the batteries may further increase their operating costs, which, in turn, is expected to hamper the market growth in the near future.
Also, the lack of charging infrastructure, lower presence of charging stations in developing countries are likely to restrain the market growth. The absence of standardization and dissimilarities in charging capacity are the main disadvantages of the market. Different countries have their set standards, such as CHAdeMO (Japan), CCS (Europe, America, and Korea), and GB/T (China).
However, the user experience of the charging infrastructure is being improved by promoting the interoperability of charging network operators and drivers. Also, some electrical manufacturers such as Tesla are working to overcome this hurdle by installing their charging networks. Therefore, key players are planning to find solutions to these challenges and expand their businesses.
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Lithium-ion Battery Segment to Hold the Largest Share Fueled by Their High Energy Densities
Based on the battery type, the market is segmented into lithium-ion and lead-acid batteries. The lithium-ion segment holds the largest share in the global market for electric three wheelers. These batteries have higher energy densities as compared to lead-acid batteries. Thus, the battery size can be made smaller than others, thereby maintaining the same storage capacity. Also, the average charging time required for a lead-acid battery is 10 hours whereas lithium-ion batteries take around 3 to 4 hours to charge completely.
Moreover, electric vehicles have the largest market share of lithium-ion batteries and will remain the dominant shareholder in the forecast period. For instance, the government of India is making additional efforts for promoting EVs by including them in the lower GST slab of 5%, as compared to the GST of 12% for ICE vehicles. Also, the government has reduced the GST on lithium-ion batteries from 28% to 18% from July 2018.
1000 W to 1500 W Segment is Expected to Hold the Largest Market Share
Based on the power type, the market is segmented into up to 1000 W, 1000 W to 1500 W, and above 1500 W.
The 1000 W to 1500 W segment accounts for the largest share in the global market owing to their operational cost benefits. This growth is attributed to the development of high-energy powered vehicles by prominent manufacturers. The increasing inclination towards electrification of vehicles and the growing demand for E-3Ws, especially in developing countries, is compelling manufacturers to invest in R&D and improve the power capacity of vehicles in order to meet the ever-increasing requirements.
Also, rapid industrialization opens opportunities for goods carrying E-3Ws with high energy capacity that can allow these vehicles to travel long distances for transporting loads and goods. Furthermore, the increasing demand for high-speed Electric 3-wheelers and the entry of conventional three-wheeler manufacturers into the EV market are expected to boost the electric three wheeler market growth significantly during the forecast period.
Passenger Carrier Segment to Dominate Backed by Rising Middle-class Population
Based on the end use type, the market is further segmented into passenger carriers and goods carriers. The passenger carrier segment holds a significant share in the global market. This dominance is attributed to the high demographic growth rate, especially in developing countries that comprise a larger middle-class population that prefers public transport over private vehicles for daily commuting. Also, the need for last-mile connectivity is increasing, and electric three wheelers being environmentally friendly and economical compared to taxis and cabs, are gaining high popularity in the market.
Moreover, the government's increasing support and favorable initiatives to promote eco-friendly public transport in various urban and suburban parts of the country are anticipated to boost the adoption of E-3Ws in the global market. For instance, V K Kapoor, Chairman, Saera Electric Auto, stated that these E-3Ws generate an average income of Rs 800-1000 per day for an e-rickshaw owner. Hence, the cost of operation and maintenance is almost reduced by 80 percent compared to conventional 3Ws, which is profitable for the driver and customers. Thus, this advantage will further drive the market for electric passenger carriers.
Nevertheless, the global share of the goods carrier E-3Ws is also growing significantly due to the expansion of the industrial sector and its recognition of electric three wheelers as economical, eco-friendly, and lightweight commercial vehicles for intra-city transportation goods and other utilities. Additionally, the innovation and development of advanced technologies in electric 3Ws is expected to create more opportunities for electric goods carrying 3Ws. For instance, Omega Seiki launched its two electric 3W models, Singha and Singha Max, offering 45 Kmph and 60 Kmph of top speed, respectively. These vehicles comprise an application that captures data through cloud computing and telematics on vehicle running, positioning, and mileage.
Asia Pacific Electric Three Wheeler Market Size, 2020 (USD Million)
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The market size in the Asia Pacific stood at USD 514.46 million in 2020. The region holds dominance in the global market owing to the high demographic growth, a larger middle and lower-middle-class income population, and increasing inclination towards electrification of vehicles in this region. Transportation modes other than four-wheelers are also electrifying. Since its introduction, electric mobility has rapidly expanded with shared electric-assist bicycles, electric scooters, and E-three-wheelers in several parts of this region. China accounts for the largest share in the market, followed by India and other developed and developing countries. The Government of India is actively taking initiatives to promote E-3Ws in the country due to the high pollution rate caused by fuel-based vehicles. Also, legal organizations are providing subsidies and incentives on EVs.
For instance, in December 2019, the Indian government announced phase-II of the FAME India scheme, which primarily focuses on promoting the electrification of public & shared transportation and provides subsidies, including incentives of INR 2,500 crore(around USD 330 million) for approximately five lakhs commercial E-three-wheelers including e-rickshaws. Moreover, at the state level, the Delhi government is also supporting the E-3Ws market by offering financial and non-financial incentives, including targeted purchase subsidies, hire purchase schemes, open permit systems, scrapping incentives, and interest subvention on loans.
Europe holds the second-largest share in the global market due to prominent automotive players and the rapid adoption of vehicle electrification in this region. Electric three wheeler manufacturers are investing exponentially in R&D for innovating technologically advanced mobility solutions. For instance, the EU-LIVE, a European R&D project funded by Horizon 2020, has been unveiled to cater to a wide range of L-category (3-wheeled vehicles one can use at a speed above 50 km/h on any road) electrified mobility solutions. The three-wheeler is equipped with a plug-in hybrid electric vehicle (PHEV) powertrain, two electric in-wheel motors, and a gasoline internal combustion engine.
North America is expected to show steady growth in the global market due to the low adoption rate of three-wheelers in this region compared to other regions. However, a considerable amount of E-3Ws is used for commercial purposes, such as transporting goods and utilities within the industrial area or in towns.
Other regions such as Latin America, the Middle East, and Africa would show significant growth in the market as prominent companies from the Asia Pacific and Europe are mapping their presence in these countries to expand their businesses. The United Nations Environment Programme supports developing countries to formulate national plans to introduce two-wheel and three-wheel electric vehicles in Africa (Ethiopia, Morocco, Kenya, Rwanda, and Uganda) and Asia (Philippines, Thailand, and Vietnam).
For instance, Atul Limited, a leading low-cost three-wheeler company in India, plans to export its vehicles to Nigeria, Tanzania, Kenya, and other parts of Africa to capture the non-discovered markets. Additionally, in December 2020, Sokowatch, an innovative East African e-commerce platform, launched its three-wheeled electric vehicles, commonly known as a tuk-tuk, to its delivery fleet in Uganda as the first-ever EV in East Africa.
Mahindra Electric Mobility Limited is a Leading Player in the Market
Mahindra Electric Mobility Limited is a leading company and pioneer in India's Indian E3V competitive landscape. In the view of bringing tomorrow’s movement today, the company has created a comprehensive roadmap to launch a robust electric vehicle ecosystem by largely investing in innovating next-gen technologies and globally acknowledged products to drive sustainable mobility. The company offers a wide range of electric vehicles and will be increasing its range further by developing new high-end electric powertrains, systems integration, motor controllers, and battery technology. The next-generation EV models will offer higher speeds, longer range, and high-tech connected car technologies to enable advanced mobility solutions. In October 2020, Mahindra Electric Mobility Limited launched its new Treo Zor Electric 3WCargo model in India. The new Treo has three variants- delivery, pickup, and flatbed.
However, other prominent players, including Piaggio & C.SpA and Terra Motors, have also adopted aggressive adoption strategies to retain their competitive landscape positions across the globe. This is anticipated to influence the global market as these companies are likely to boost EV innovation during the forecast period.
An Infographic Representation of Electric Three Wheeler Market
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The electric three wheeler market report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading product applications. Besides this, it offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several major factors that have contributed to the market's growth over recent years.
Value (USD million) & Volume (units)
By Battery Type
By Power Type
By End Use Type
Fortune Business Insights says that the global market size was USD 574.96 million in 2020 and is projected to reach USD 831.10 million by 2028.
In 2020, the Asia Pacific market value stood at USD 514.46 million.
The market is projected to grow at a CAGR of 5.2% in the forecast period (2021-2028).
The battery type segment is expected to lead this market during the forecast period.
Increased government initiatives and subsidies to promote three-wheeled electric mobility are driving the market growth.
Mahindra Electric Mobility Limited is a major player in the global market.
The Asia Pacific dominated the market in terms of share in 2020.
The rising preference for electric vehicles over fossil fuel vehicles is expected to drive the products adoption.
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