Low running cost electric 3W will drive 3W market in India – Ken Research

Amazon plans to add 10,000 electric rickshaws to its delivery fleet in India by 2025. Similarly, furnishing giant IKEA, and retail joints like Big Basket, Flipkart and Grofers are among those increasingly relying on e-rickshaws for clean and economical last-mile delivery.

The decision of the government of India to allow sale of electric three-wheelers without batteries has opened up a new gamut of opportunities of budding EV manufacturers in India. EV manufacturers focusing on low-cost three wheelers will now be able to capitalize on the even lower costs especially for the B2B segment where the client can avail a battery swapping model to keep the EVs running.

While the upfront cost may be reduced by about 30-40% for e-3Ws without battery, its operating cost will be relatively higher than e-3Ws with battery. E-3Ws with high assured utilization rates are a more profitable prospect for businesses, as they become cheaper to operate per km with increased utilization. This has been recognized by big companies in the Indian market.

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. To boost electric mobility, the government aims to support through subsidies about 5 lakh electric three wheelers in the country. The focus is also on creating electric charging infrastructure to promote the usage. Phase-II of FAME India Scheme is being implemented with a total budgetary support of Rs 10,000 crores. 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 a market that is trying to strengthen its position in the industry, COVID 19 came as a severe blow. However, as per the industry experts the EV three wheeler market will recover swiftly from Covid-19 setback when compared to their ICE counterparts and their outlook remains strong in the medium term. The electric 3 wheeler market in India has a great potential to grow supported by numerous government initiatives. The electric three-wheelers would offer the lowest cost of transportation, with e-commerce delivery coming in and a higher need for last-mile connectivity solution As per EV market forecast by Frost and Sullivan, e-rickshaws, e-autos and e-two wheelers are the most promising segments for electrification in India and are expected to account for over four-million units by 2025.

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