PUBLISHER: Market Xcel - Markets and Data | PRODUCT CODE: 1630542
PUBLISHER: Market Xcel - Markets and Data | PRODUCT CODE: 1630542
Global electric three-wheeler market is projected to witness a CAGR of 10.20% during the forecast period 2025-2032, growing from USD 1.51 billion in 2024 to USD 3.29 billion in 2032. The electric three-wheeler market is rapidly expanding, supported by a few important factors, including changing urban transportation and expansion in logistics and e-commerce. An important factor is the rise in government incentives for the sale and purchase of electric vehicles to reduce emissions and promote the adoption of electric vehicles. For instance, India's FAME II scheme has helped increase sales from support from the government to consumers and manufacturers, whereas raising consumer environmental awareness is driving this demand for electric three-wheelers. As the urban population grows and pollution increases, individuals and enterprises are moving toward cleaner alternative solutions instead of conventional gasoline-based vehicles.
Moreover, technological advancements are making batteries more cost-effective and efficient. This also supports the use of electric three-wheelers by both common people and logistics or delivery companies. Furthermore, digital technologies add to the user experience because electric three-wheelers serve as a suitable solution for ride-hailing services.
For instance, in August 2024, Mahindra Last Mile Mobility Limited (MLMML), a subsidiary of Mahindra & Mahindra Limited (M&M Ltd.), launched the all-new e-Alfa Plus. This new electric three-wheeler is built to suit customer requirements in both urban and rural transportation. A 150 Ah Lead Acid battery powers the vehicle and one of the key highlights of the e-Alfa Plus is its real-world range of 100+ kilometers on a single charge.
Rising Urbanization is Expanding the Global Market Growth
Rising urbanization, growing preference for efficient and sustainable transport solutions in highly populated and emerging regions, and development of charging infrastructure are key drivers for the electric three-wheeler market growth. The need for compact, maneuverable vehicles in crowded cities increases the requirement for efficient transportation of goods, which further propels the global electric three-wheeler market demand. These vehicles are both easy to maintain and environmentally friendly, thereby fitting into the global move to reduce emissions and clean up the air. The advancements in three-wheelers make them even more attractive. Features like GPS tracking, telematics, and better battery technologies are being integrated into these vehicles, thereby increasing operational efficiency and user satisfaction.
For instance, in September 2022, OMEGA SEIKI MOBILITY PRIVATE LIMITED signed a contract with Porter, part of SmartShift Logistics Solutions Private Limited, an intra-city logistics company, to deploy over 5,000 electric three-wheelers in India by 2023.
Government Initiatives Fuel the Global Electric Three-Wheeler Growth
Government initiatives are the significant driving force behind the growth in the global electric three-wheeler market, especially in countries like India, where policies are created to promote electric vehicle uptake strategically. Part of these efforts is embodied in the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME II), which offers significant subsidies to electric three-wheelers. Under this scheme, incentives are available for USD 591.72 per electric three-wheeler vehicle, which highly reduces acquisition costs and pushes industries and customers toward electric variants. Several state-level incentives supplement the national framework in terms of further subsidies, tax exemptions, and waivers on registration fees, thereby making electric three-wheelers more attractive. Globally, similar initiatives are growing as governments identify their need to address environmental concerns and decrease greenhouse gas emissions. For instance, Thailand will offer incentives in the way of subsidies to encourage owners of tuk-tuks to shift from liquefied petroleum gas to electric models. Countries are fast adopting policies that encourage electric mobility in line with larger goals towards sustainability.
Moreover, the Indian government has supported the development of EV charging infrastructure through the FAME II scheme, where up to 70% of installation costs for charging stations are covered. This not only provides easier access to charging but also improves the operational viability of electric three-wheelers for commercial applications, such as food delivery services. Tax benefits under Section 80EEB, wherein interest is paid for loans undertaken to buy EVs, can be claimed as business deductions, reduce financial costs, and therefore encourage uptake.
For instance, according to the Global EV Outlook 2024, one in five three-wheelers sold globally in 2023 was electric, and nearly 60% of those sold in India, boosted by the Faster Adoption and Manufacturing of Electric Vehicles (FAME II) subsidy scheme.
Dominance of Passenger Carrier Electric Three-Wheelers
Several compelling factors related to consumer preferences and urban transport needs underpin passenger carrier electric three-wheelers' dominance in the global market. This trend is mostly evident in densely populated areas where affordability and convenience are top priorities. This economic benefit resonates well with consumers in emerging markets, where budget-friendly transportation options are essential. One of the key growth enablers is the expanding requirement for environmentally friendly transportation solutions. Electric three-wheeler alternatives prove much cleaner than traditional internal combustion-based vehicles, thus directly aligning with carbon footprint reduction and anti-air-pollution efforts worldwide. Subsidies and government incentives fuel these transitions, making electric passenger carriers even more appealing to everyone. Technological advancements also contribute to the appeal of passenger carrier electric three-wheelers. Innovations in battery technology have improved range and efficiency, allowing these vehicles to meet the demands of urban commuting effectively. Additionally, quieter operation enhances their suitability for city environments, where noise pollution is a concern.
For instance, in April 2024, OMEGA SEIKI MOBILITY PRIVATE LIMITED tied up with battery manufacturer Exponent Energy Private Limited and launched the passenger electric three-wheeler Stream City Qik. It is a catalyst for economic empowerment. With its 15-minute rapid charging capability powered by Exponent, drivers now have the power to revolutionize their earnings potential as it would minimize downtime between rides and maximize efficiency on the road. The monthly income of the drivers is expected to grow by a minimum of 30% with this EV.
Asia-Pacific Dominates the Electric Three-Wheeler Market Share
Asia-Pacific accounts for a significant share, driven by a combination of demographic, economic, and regulatory factors, primarily by increasing demand for sustainable transportation solutions and supportive government policies promoting electric mobility. A key driver of this dominance is rapid urbanization and the growth of the middle-class population in countries like India and China, which has led to a heightened demand for affordable and efficient public transport options. The three-wheelers are also mostly used in the form of electric rickshaws or as passenger carriages for cost-effective traveling within cities. Besides this, the current trend prefers these vehicles as they entail low running costs. Such vehicles incur lower maintenance costs and lower fuel expenditure compared to that of regular gasoline-driven cars.
Government initiatives also play a very important role in the Asia Pacific electric three-wheeler market growth. Most of the countries in the Asia-Pacific have introduced various subsidies and incentives to promote the adoption of electric vehicles, including electric three-wheelers. Such policies not only reduce the initial purchase price but also support the development of infrastructure, such as charging stations, which is very important for improving the practicality of electric mobility.
For instance, in January 2024, Terra Motors Corporation signed a Memorandum of Understanding (MOU) with the Tamil Nadu State Government to electrify the state's EV infrastructure during the 3rd edition of the Tamil Nadu Global Investors Meet. The company has committed to investing USD 5.917 million to improve the charging infrastructure for electric vehicles in the state.
Future Market Scenario (2025-2032F)
Enhanced battery production capabilities will be expected as regions seek self-reliance in lithium-ion cell manufacturing.
Continued encouragement for electric three-wheeler adoption through governmental and non-governmental initiatives.
Growing preference for electric three-wheelers as safe, economical, and eco-friendly public transport solutions.
Increased investment in research and development due to stricter environmental regulations.
Key Players Landscape and Outlook
The global market for electric three-wheelers is marked by a dynamic balance of major players driving change and growth in this sector. Companies are investing heavily in research and development to enhance vehicles' performance, such as increasing capacities and improving battery efficiency, while the market is driven upwards by increasing demand for a sustainable transport solution and last-mile connectivity. However, high battery prices, as well as unstandardized charging infrastructure, pose potential barriers to growth for this market. Despite such challenges, huge opportunities are present, both through the shared mobility sector and the expansion of accessible financing options for consumers. As the demand for eco-friendly and efficient transportation continues to rise, the outlook for key players in the electric three-wheeler market appears robust, with ongoing innovations and collaborations set to enhance their competitive edge and capture greater market share.
For instance, in November 2024, Ola Electric Mobility Ltd. announced the launch of its first electric 3W by the second half of 2025. The electric three-wheeler will use the same S1 platform as its two-wheelers in terms of electronics, battery architecture, and powertrain.
For instance, in July 2024, Mahindra Last Mile Mobility Limited (MLMML), a wholly owned subsidiary of Mahindra & Mahindra Ltd. (M&M), announced a strategic tie-up with Ecofy Finance Private Limited, India's green-only NBFC backed by Eversource Capital, which is dedicated to financing India's green transition. This strategic tie-up is expected to fuel the adoption of electric three-wheelers in India. Through this partnership, MLMML would be able to provide niche finance solutions to its customers and take them closer to the micro-entrepreneurial journey committed to making green mobility accessible and affordable for all.
All segments will be provided for all regions and countries covered
Companies mentioned above DO NOT hold any order as per market share and can be changed as per information available during research work.