The electric two and three-wheeler market is growing at a rapid pace due to various factors. The first and foremost one is the rising government support to boost the adoption of electric vehicles. In addition to that, the declining production of gas-powered vehicles is another significant factor boosting the growth of the industries. Furthermore, soaring fuel prices are expected to surge the adoption of electric vehicles in the coming years. Governments are also imposing strict mandates to control vehicular emissions. Thus, the electric vehicle industry is expected to witness a myriad of opportunities in the future.
However, Asia-Pacific holds the largest share in the global electric two and three-wheeler market. According to a study by Astute Analytica, the Asia-Pacific electric two or three-wheeler market holds a share of 98.9%. In addition to that, the same source suggests that the Asia-Pacific electric two and three-wheeler market is forecast to grow at a tremendous CAGR of 12.7% during the forecast period from 2022 to 2030. The market will reach the value of US$ 41,018.2 million by the year 2030. Here is the list of factors driving the growth of this market. It is due to rising consumer purchasing power and increasing awareness about the benefits of electric vehicle. Moreover, the growing adoption of three-wheelers, such as rikshaw, in countries like India will primarily drive the growth of the overall market.
Contribution of Manufacturers:
Asia-Pacific is home to some of the prominent manufacturers of electric two and three-wheelers, such as Hero Electric Vehicles and Saera Electric Auto Pvt Ltd. in India, Terra Motors Corporation in Japan, Chongqing Zongshen Vehicle Co., Ltd in China, etc. These companies are continuously unveiling the best possible two-wheelers and three-wheelers to outgrow competitors in the industry.
For instance, Terra motors have launched various electric scooters and e-rikshaws in the Indian market to expand its geographical reach. The firm has established a strong foothold in the electric two and three-wheeler industry. In its 3-wheeler portfolio, the firm has included a range of products, including its T4, R6, Mini-Cargo, etc. Its EV2 wheeler offerings include a range of products for Taiwan’s consumer and Indian consumers.
The firm recently inked a contract with the government of India, in which it delivered a range of E-Rickshaw to the Indian government. The Indian government will offer these vehicles to the organization where women drive the vehicle. Thus, this initiative leading to women’s empowerment is also escalating the revenue growth of the producers.
Government Support:
The government push for an electric vehicle is growing across all regions. However, the most populated countries, such as China and India, are witnessing a major increase in the adoption of electric vehicles. China, which is the manufacturing hub for electric vehicles, is also recognized for its excellent implementation of electric vehicles. China recorded the highest sales of electric cars in 2018.
The government of India is also making significant efforts to combat the problems related to vehicular emission. Most of the people in the country fall under the category of the middle class or lower-middle class. Thus, it becomes difficult for them to afford electric vehicles. The government of India is offering various incentives, such as Purchase Incentives, Coupons, Interest Subventions, Road tax exemption, Registration fee exemption, Income tax benefits, Scrapping incentives, interest-free loans, top-up subsidies, etc., to combat the financial issues related to the electric vehicle.
Declining Prices:
The high cost of electric vehicles has always been a major concern for buyers. However, the soaring prices of fuels are no more a random topic. Thus, electric vehicles are gaining significant popularity as it does not require a high budget for fuel. Moreover, companies are continuously working on combating these issues. For instance, Japanese electric vehicle manufacturer Terra Motors recently unveiled its low-priced electric three-wheeler (e-rikshaw) priced at Rs.130,000 lakh, which is significantly lower and more efficient than a fuel-based rikshaw.
Growing Sales:
With the growing sales of electric two and three-wheelers, the region is expected to hold the place of the largest market even in the coming years. Industry players are witnessing steadily growing sales of electric two-wheelers.
Yadea, based in Jiangsu Province, is known as China’s leading two-wheeled electric scooter manufacturer. Its global sales exceeded 4 million units in 2018, accounting for approximately 11.7 percent of total global electric vehicle sales. Yadea also became the first company in the industry to be listed on the Hong Kong stock exchange in 2016.
Ola Electric also made the headlines recently as it completed the delivery of its 3,904 units in February 2022. Furthermore, the company marked sales of approximately 1,102 units in January. Hero Electric has been holding dominance in India’s EV industry. The brand marked the sales of 13,023 scooters in March and nearly 7,360 units in February 2022.
Okinawa Autotech also sold nearly 8,284 units in March 2022, while Ampere recorded 6,338 deliveries in the same month. Ola Electric also introduced its plan to thrive in the industry. The firm announced to invest Rs 2,400 crore in the development of the factory. In addition to that, the firm has also inked a deal with the country’s leading banks and financial institutions like ICICI Bank, Kotak Mahindra Prime, and TATA Capital to offer financial assistance to the buyers. These institutions include HDFC Bank.
Investments:
Recognizing the potential scope of electric two and three-wheelers, companies are leaving no opportunity to invest in the market. For instance, Japanese electric vehicle manufacturer Terra Motors Corporation inked a pact for a variety of projects in India and has invested a significant amount in the Indian market. The company spent nearly US$ 5 million in the country. In 2018, the firm again lined up its investment of more than US$ 5 million in India for expanding its product portfolio.
Moreover, the firm, Terra motors inked a pact with the global leader in clutch manufacturing, F.C.C Corporation (Japan). F.C.C is a leading manufacturer of clutches for motorcycles and automobiles and is expanding its business globally. F.C.C holds more than 60% of the market share and business base in India, the world’s largest motorcycle market. The companies anticipate the future growth of electric vehicles not only in the 4Ws market but also in the 2Ws market. They’ve been working on developing electric power units for light mobility.
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