Low operating and maintenance costs of the electric 3-wheelers (e3Ws) drive the market for these vehicles in the Asia Pacific market to grow at a CAGR of 20.8% by 2027.
According to the recent report - Asia Pacific Electric 3-Wheeler market by end-use, range, battery type, battery capacity, motor power and payload capacity - Forecast to 2027, published by ResearchAndMarkets.com, the Asia Pacific e3W market is and is projected to grow to 702.1 thousand units by 2027, from the estimated 272.7 thousand units in 2022.
According to the report, one of the most important factors driving the Asia Pacific e3W market is the increasing prices of petroleum products. Thus, ICE 3-wheelers are generally expensive to operate. Consumers from emerging countries are already affected by the increasing petrol and diesel costs. The e3Ws operating on electricity significantly reduce these vehicles' operating costs as petrol and diesel are eliminated.
The e3Ws are eco-friendly battery-operated 3-wheelers with better economy and lower operating cum maintenance costs than ICE 3-wheelers. Manufacturers are working towards developing e3Ws that have a higher range than the current models. As e3Ws have a lower number of moving parts than conventional 3-wheelers, maintenance is not a major concern, the report said.
The highest maintenance cost is expected to be the cost of changing the battery, which is not frequent. The e3Ws provide zero tailpipe emissions and noise-free transportation. These vehicles, with a carrying capacity of between three to seven people, provide mobility solutions for short trips of up to 10-12 km, for first and last-mile connectivity, and as feeder services to the main haul public transport.
The electrification of 3-wheelers is expected to result in lower operation and maintenance costs compared to ICE vehicles, making them economically viable. This is driving the market for electric 3-wheelers in the Asia Pacific region, ResearchAndMarkets.com observed.
Incentives & Subsidies
Growing concerns over increased pollution by the automotive industry is the prime reason for Government bodies to promote e3Ws over conventional ones. They have recognised the need for promoting energy-efficient vehicles to reduce the increasing pollution.
To attract and encourage people to buy e3Ws, Government bodies of different countries are introducing lucrative schemes and incentives that include formidable discounts, free electricity (initially), and free public charging stations. Apart from this, Governments are working with manufacturers to build charging and manufacturing facilities, exempting them from taxation. These factors are expected to drive the future Asia Pacific e3W market, the report noted.
For instance, in 2020, Thailand's Board of Investment (BOI) issued tax incentives for the country's electric vehicle industry. Originally only state agencies took on the mantle to move the industry forward by developing vehicle and charging station prototypes. However, due to government incentives, the industry has become increasingly attractive to the private sector.
New Revenue Pockets
The Asia Pacific is a high-growth market for e3Ws. Several countries in this region have a high penetration of 3-wheelers and have witnessed a surge in demand for low-emission and fuel-efficient commuting alternatives due to stringent emission norms and increasing crude oil prices.
In April 2022, Bajaj Auto announced its plan to commercially launch its first e3Ws during the second half of 2022. This showcases that the demand for efficient and affordable e3Ws is expected to grow significantly in the Indian market. OEMs are entering into strategic partnerships to strengthen their bases in the Asia Pacific electric 3-wheeler market.
For instance, in April 2022, Atul Auto announced its plan to develop a prototype version of both cargo and passenger e3W with battery swapping solutions. It will employ the Honda Mobile Power Pack e: Swap, which is a swappable battery pack, and a powertrain system from Valeo. The market in the Asia Pacific region is expected to grow exponentially in the coming years due to the high adoption of e3Ws in China and the high potential of the Indian market, the report added.
Courtesy: ResearchAndMarkets.com. Photo is representational; courtesy: Mahindra.