Electric Three-Wheeler: Market Drivers and Opportunity Assessment by Technavio

Technavio’s latest market research report on the global electric three-wheeler (3Ws) market provides an analysis of the most important trends expected to impact the market outlook from 2017-2021. Technavio defines an emerging trend as a factor that has the potential to significantly impact the market and contribute to its growth or decline.

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Technavio has published a new report on the global electric three-wheeler market from 2017-2021. (Gr ...

Technavio has published a new report on the global electric three-wheeler market from 2017-2021. (Graphic: Business Wire)

The global electric 3W market is expected to grow at a CAGR of more than 17% during the forecast period. The low ownership and operational costs of electric 3Ws compared with fuel-powered 3Ws and the increased purchasing power of the middle class have driven the growth of the electric 3W market.

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The top three emerging market trends driving the global electric three-wheeler market according to Technavio research analysts are:

  • Expansion by local manufacturers to foreign countries
  • Solar powered electric 3Ws and charging stations
  • High-density, high-power, and small-sized lithium-ion batteries

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Expansion by local manufacturers to foreign countries

Most of the electric 3Ws available in India, Sri Lanka, Bangladesh, and Indonesia have been assembled only in those countries, but the vehicle parts have been imported mainly from China as completely knocked down units, which has resulted in an increase in vehicle cost. OEMs in Japan and China have been expanding their operations to potential market countries, which would bring down the cost of the vehicle and eventually increase charging infrastructure and service facilities.

For instance, Terra Motors, Japan’s leading electric 2W and 3W manufacturer launched its electric 3W market in India in 2016 with two manufacturing facilities in north India with a production capacity up to 30,000 units. Another trend is the expansion of Asian electric 3W manufacturers into American and Europe countries to increase the adoption of electric 3Ws, mainly for tourist attraction and sightseeing.

Solar powered electric 3Ws and charging stations

The impact of electrically powered 3Ws on power grids, especially in Asian countries like India and China is high. This has made manufacturers explore options for renewable energy power generations to be used for EVs.

One such movement is the solar-powered electric 3Ws, Humrahi passenger and cargo series, launched by LOHIA AUTO INDUSTRIES in India in 2016. This allows 3W to charge the battery through solar energy while the vehicle is running on the road during day time. Solar panels installed over the 3W, increase the range up to 15% and the lifecycle is given up to 10 years.

“Another development in this field is the electric 3W charging station powered by solar energy. This can allow the vehicle charging station to be independent of the national power grid, thus, reducing the energy demand over annual power production through non-renewable energy resources. In Bangladesh, an entrepreneur had developed such a solar-powered charging station where up to 10 electric 3Ws could be charged,” says Amey Vikram, a lead analyst at Technavio for automotive manufacturing research.

High-density, high-power, and small-sized lithium-ion batteries

Since electric 3Ws are powered and driven by battery-powered systems, improvements in the battery technology will have a positive influence on the global electric 3W market. In line with this, several improvements in the technology of battery electric vehicles are being undertaken, which will aid in making these vehicles more desirable for consumers. For example, with the help of advancing technology, lithium-ion batteries have been made lightweight, with a longer lifespan as compared to conventional lead-acid and valve-regulated lead-acid (VRLA) batteries.

“Battery cost accounts for nearly 50% of an electric 3W's price. Hence, a major cost reduction in batteries is needed to introduce cheaper models. This reduction can be achieved by designing lithium-ion batteries with high power density. Higher power density will allow batteries to be much smaller, therefore, much cheaper. Instead of a 1.0 kWh battery, future lithium-ion batteries will only be about 0.3-0.5 kWh,” says Amey.

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