How India’s EV Transition Is More Resolute In The Three-Wheeler Industry
The three-wheeler industry in India is poised for significant growth in the coming years, driven by the adoption of EVs.
At the outset of the new millennium, electric vehicles (EVs) on Indian roads were almost absent except for a few electric three-wheelers (e3Ws). So, it would not be an exaggeration that the genesis of EVs in India is led by e3Ws. And from then onwards, these light and swift carriers have become the front fleet of India’s green mobility. With its large-scale demand in both urban and rural areas of the country, this particular segment is expected to grow at 70 per cent CAGR by 2030.
India's transition to electric vehicles (EVs) has gained momentum in recent years with the government's push towards a cleaner and greener economy, and the three-wheeler industry is playing a crucial role in driving this transition. The three-wheeler segment is a significant contributor to the Indian automobile industry, with a large number of vehicles being used for passenger transportation, last-mile delivery, and cargo transportation.
e3Ws have registered deep penetration in both passenger and cargo transportation in the recent past. From April 2022 to February 2023, 345,200 registration of e3Ws increased by 124 per cent over the previous year. e3Ws are capable of carrying the load, logistics companies are rapidly switching to e3Ws to curtail cost per mile. This means that the potential impact of transitioning these vehicles to electric power is significant. It is estimated that three-wheelers account for about 10 per cent of India's total vehicle fleet.
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Benefits Of e3Ws Over ICE Three-Wheelers
Electric three-wheelers have lower operating costs than their fossil fuel-powered counterparts. Electric vehicles have fewer moving parts and require less maintenance, which reduces operating costs over the vehicle's lifetime. Also, the cost of electricity is lower than the cost of petrol or diesel, making EVs more cost-effective in the long run.
EVs are cheaper to operate than their gasoline-powered counterparts, which makes them a more cost-effective option for fleet owners and commercial users. This is particularly true for the three-wheeler segment, where operating costs can be a significant expense.
The use of fossil fuel-powered vehicles contributes to air pollution, which is a major concern in India's cities. Electric three-wheelers produce zero tailpipe emissions, which makes them a cleaner alternative to fossil fuel-powered vehicles.
Growth Factors
The Indian government has taken several initiatives to promote the adoption of electric three-wheelers such as tax breaks, subsidies, and exemptions. These incentives are particularly attractive for the three-wheeler segment, which has a significant role in the Indian economy. Under the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, the government provides financial incentives to manufacturers and buyers of EVs. Also, several state governments have announced subsidies and incentives for EV buyers and manufacturers.
Several manufacturers have already introduced electric three-wheelers in India, which are gaining popularity among consumers. These manufacturers are investing heavily in research and development to improve the performance and reliability of EVs, which is expected to drive further growth in the segment.
Scope For Improvement
The availability of charging infrastructure is critical for the adoption of EVs. In recent years, India has made significant progress in developing a charging infrastructure for EVs. Several public charging stations have been set up in major cities, and the government has announced plans to set up more charging stations across the country.
To further enable a faster penetration of electric vehicles on Indian roads, the government needs to focus on lowering interest rates for EV financing and standardized residual battery value calculation. The government should also consider focusing on creating awareness about the vehicle scrappage policy to encourage the phasing out of end-of-life vehicles and drive EV sales. Moreover, considering the lack of enough charging points in the country, there is a pressing need to create a robust EV battery charging infrastructure in the country with specific grants for research and development (R&D) of advanced batteries.
Road To Success
India's three-wheeler industry is leading the country's transition to electric vehicles due to their high usage, low operating costs, government initiatives, improved infrastructure, and environmental concerns. The three-wheeler industry in India is poised for significant growth in the coming years, driven by the adoption of EVs. With government support and increasing awareness among consumers, the transition to electric three-wheelers is likely to accelerate, leading to a cleaner and greener future for the country.
(The author is the managing director at Saera Electric Auto Pvt. Ltd.)
Disclaimer: The opinions, beliefs, and views expressed by the various authors and forum participants on this website are personal.
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