The adoption of electric vehicles has increased all over the globe, including Asia-Pacific (APAC), because of the surging concerns regarding the surging air pollution levels. Conventional vehicles emit greenhouse gas emissions that cause pollution and environmental degradation, owing to which, the focus is now shifting towards electric vehicles. In APAC, the adoption of electric-three wheelers has been rising, which can be majorly attributed to the favorable government policies. Governments in the region are offering tax rebates and subsidies for encouraging the adoption of electric-three vehicles.
For instance, the Indian government is offering subsidies ranging from $370 to $900, based on the OEM and the model, under the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles. Due to this, the APAC electric-three wheeler market is projected to witness considerable growth in the years to come. The demand for these vehicles in the region is also driven by the fact that they have low cost of ownership.
A number of countries in the APAC are region are developing, which mean that the spending power of people is not as high. Therefore, low-cost vehicles witness high adoption in these countries. The operational cost of a battery electric three-wheeler is about 6 times lower than that of a diesel/gasoline powered three-wheeler. Since battery-powered vehicles run on stored energy, which has lesser cost than gasoline, the overall maintenance and operation costs of electric three-wheeler are decreased. This is leading to the high demand for these vehicles.
The APAC electric three-wheeler market is predicted to attain a revenue of $11,935.1 million by 2030, witnessing a 4.1% CAGR during the forecast period (2018–2023). On the basis of vehicle, the market is divided into load carrier and passenger carrier, between which, the passenger carrier division accounted for the major share of the market in the past, and is further expected to retain its position during the forecast period. This is because of the presence of large consumer base in the region.
The load carrier division is expected to grow at a faster pace during the forecast period due to the low operational cost of electric load carrier vehicles and expanding e-commerce industry. When battery is taken into consideration, the market is categorized into lithium-ion (Li-ion) battery and sealed lead acid (SLA) battery. Between the two, the SLA category accounted for the major share of the APAC electric three-wheeler market in 2017.
However, the adoption of Li-ion batteries is expected to rise in the years to come, which is majorly because of the falling prices of these batteries. The Li-ion category is predicted to grow at a faster pace during the forecast period. Li-ion batteries have a number of benefits, such as light weight, higher energy density, lower environmental impact, and longer life span. It is owing to such factors that the demand for Li-ion batteries is expected to rise in the coming years.
Hence, the market is growing due to the increasing government initiatives and low-cost of electric three-wheelers.