Initially built for versatility, quick and cheap transportation after World War II, the three-wheeled vehicles have been running around for over a century now. To reduce traffic congestion, save up energy, and reduce pollution due to vehicular emissions, automobile manufacturers starting to develop three-wheelers as a regular mode of transport with a significantly lower carbon footprint. Another benefit of three-wheeler vehicle is that they are exempt from state and federal rules which dictate safety and emissions standards applicable to cars because they are considered three-wheeled motorcycles. With the advent of technology and rising issues of energy security, rapid urbanization, climate changes, and sustainability, the mobility and transportation sectors are witnessing a major transformation. From traditional combustion-engine vehicles, manufacturers are gearing towards electric vehicles and solutions and shared mobility solutions. Three-wheeler electric vehicles are efficient, convenient, compact vehicles, which are considered as one of the most promising solutions to tackle any major issues related to the automobile industry. Positioned as an affordable means of transport for short-to-medium distances, the three-wheeler market segment is growing in numbers due to its ubiquitous appeal. In certain parts of the world, most notably South Asia, electrical three-vehicle passenger vehicles have become an instrumental part of the urban transport system.

According to TechSci research report on “Global Three-Wheeler Market By Vehicle Type (Passenger Carrier Vs. Load Carrier), By Fuel Type (Electric, Petrol/CNG and Diesel), By Region (APAC, Africa, South America and Rest of World), Competition Forecast & Opportunities, 2014 – 2024”, Global three wheelers market exhibited a moderate growth during 2014-2018, with value market of over USD19.4 billion in 2018, and is projected to exhibit a CAGR of 12.8%, to reach USD39.9 billion by 2024. The growing demand for three wheelers globally has been backed by their low price, easy manoeuvrability, and efficient performance. Moreover, three wheelers market is anticipated to become more promising, as companies are launching new models according to the customized specifications across different regions. Additionally, rising demand for transportation in regions like Asia-Pacific and Africa along with growing inclination towards last mile delivery of products would further propel growth in the market over the next five years.

Government Initiatives boosting the electronic three-wheeler market 

Faster Adoption and Manufacturing of Hybrid and EV (FAME) policy 

When it comes to the production and adoption of electric vehicles, India is in a nascent stage due to a lack of policy clarity among other challenges. However, to reduce pollution levels, and enhance electric mobility infrastructure, the government has laid out FAME policy. The government scheme rolled out in April 2019 intends to support the deployment of electric 2- and 3-wheeled vehicles including hybrid, e-cars, and buses by providing subsidies for clean mobility. The policy supports 5 lakh e-rickshaws with an ex-factory price of up to Rs 5 lakh providing an incentive of Rs 50,000 each. More recently, the Ministry of Road Transport and Highways have allowed the sale of electric two and three-wheelers without batteries, which significantly reduces purchase costs by about 30-40%. India is committed to giving a push to the electric vehicles market so that they form 30% of overall vehicle sales by 2030. The policy push will be crucial for the faster adoption of EVs in India however, the country has much to catch up in terms of battery price, demand incentives, supply push, and charging infrastructure.

“Green” Purchasing Promotion Measures 

Japan is one of the leading markets for electric vehicles, boasting the third largest fleet of electric vehicles in the world. In May 2009, the Japanese Diet passed “Green” Vehicle Purchasing Promotion Measures to provide incentives on the purchase of new and eco-friendly vehicles in Japan to reduce greenhouse gas emissions. The program is applicable to both domestically produced and imported vehicles. The program also offers tax deductions and exemptions to encourage the adoption of electric vehicles. The user-friendly infrastructure, support from the automotive industry, and committed government make Japan a prominent player in the electric vehicle market.  

China’s national strategy to develop electric vehicles 

As China continues to face urgent energy security and urban air pollution problems, the Chinese government has been adopting many policies for the progress of EVs development, including subsidy and tax exemption. Similarly, the Chinese manufacturers are turning their attention from export markets to fuel domestic consumerism by producing smaller and less-expensive models. The Chinese government has also increased investments in charging infrastructure, setting a goal of 12,000 charging stations, and landed generous support for China’s EV industry.

Electric three-wheelers for urban delivery 

With the e-commerce industry growing at a tremendous rate, the logistics providers are experimenting with different solutions to solve the demand in Courier, Express, and Parcel deliveries, responsible for environmental problems and challenges associated with last-mile delivery. Electric three-wheelers have become an ideal alternative for diesel engines for last-mile delivery, playing an indispensable role in the functioning of urban agglomerations. Due to their ability to circumnavigate most traffic jams and deliver small goods, the logistics operators are widely incorporating three-wheeler EVs. Some of the advantages that three-wheeler electric vehicles offer for goods and service delivery are as follows.

• Ease of manoeuvrability allowing navigation on narrow roads
• Cost-efficient due to electrical engines, that are relatively cheaper and easier to maintain
• The compact design makes the three-wheeler EV circumvent traffic jams
• More loading capacity compared to 2-wheeled vehicles ensures better safety of parcels

Two of the key players in the delivery market are Dalsey, Hillblom, and Lynn (DHL) and United Parcel Services (UPS) are setting foot in the cargo bike delivery business with electric three-wheeler to make most of their potential. Substituting three diesel-powered engines with electric vehicles could reduce fuel consumption by approximately 32 litres per day and reduce up to 25.5 tonnes of CO2 emissions per year. While the true potential of EVs is still underrated by companies and policymakers, electric three-wheelers could transform the face of urban logistics in an eco-friendly and cost-effective way. However, policymakers and logistic companies need to elaborate a better regulatory plan for the application of three-wheeler electric vehicles to optimize public space use, ensure the safety of drivers and the public.

Why do diesel three-wheelers need to be replaced with electric three-wheelers?

The three-wheeled diesel vehicles widely used for point-to-point shuttle across different cities in India are inherently designed to emit more toxic pollution with higher particulate matter compared to most other vehicles on roads. The dirty noxious gases released by the vehicle are cancer-causing fumes, which can lead to chronic health conditions such as asthma, lung cancer, and various other diseases. A diesel auto is legally allowed to emit 1.7 times higher particulate matter than a BSIV diesel car as per the current emissions standards of Bharat Stage IV. Although the Supreme Court has directed Comprehensive Action Plan (CAP) including the introduction of battery-operated zero-emissions para-transit as feeders for last-mile connectivity, the CAP direction has yet not catalysed the national policy action.

Electric three-wheelers are environment-friendly and economical means of urban transport, which can serve as a better substitute for fossil-fuel powered auto-rickshaws. Electric three-wheelers utilize a sustainable renewable source of energy, provided that the electric grid is low carbon intensity. The use of e-vehicles would directly enhance the quality of air, contributing to a significant reduction in carbon emissions as well as urban noise pollution. Offering cheap and fast transport services, electric three-wheelers are good at serving last-mile connectivity. The grams of CO2 emitted per kilometre of e-rickshaw is almost one-fourth the amount released by spark-ignition and compression-ignition auto-rickshaws.

Challenges for electric three-wheelers 

The type of battery technology utilized for electric vehicles determines the overall efficiency and performance of electric three-wheelers. While lead-acid batteries are a cheaper option than lithium-ion batteries, improper handling and disposing of the former can lead to leakages. Lack of charging infrastructure in many cities, especially in low-income countries makes recharging batteries into the electric grid even more expensive. Moreover, keeping in mind the vehicle safety for citizens, the design needs to be suited as per the configurations of the road and the type of operation for which the vehicle will be deployed for.

Conclusion

Considering the socio-economic and environment-friendly benefits, the number of electric three-wheelers is growing in number, but the rate of adoption is still low. In some countries, electric-three vehicles have not been legalized as a legal mode of transport, which is hindering their development. In a broader context, government agencies, environmental agencies, relevant private entities must be involved in regulating the technical aspects related to vehicle design, performance, and safety to ensure the confirmation of environmental standards.

According to TechSci research report on “Global Electric Three Wheeler Market By Vehicle Type (Passenger Carrier & Load Carrier), By Battery Capacity (<101Ah & >101Ah), By Battery Type (Lithium Ion & Lead Acid), By Region (APAC & Africa), Competition Forecast & Opportunities, 2013-2023”, Global electric three wheeler market is projected to grow at a CAGR of over 19% to surpass USD6 billion by 2023 on account of rising air pollution levels across the globe and inclination of users towards cleaner automobiles. Moreover, increasing support from various governments and their initiatives to evolve the automobile industry into a cleaner industry is further anticipated to positively influence the global electric three-wheeler market during the forecast period. Additionally, growing affordability of electric three wheelers is further anticipated to fuel their demand in the coming years.