The International Energy Agency’s latest Global EV Outlook says one in five three-wheelers sold globally in 2023 was electric and nearly 60% of those were sold in India
The government’s perseverance, persistent support and enabling policies seems to have finally paid off in India, which has now overtaken China to become the biggest market of electric three-wheelers globally, recording a sales figure of over 5,80,000 in 2023, according to the International Energy Agency’s latest Global Electric Vehicle Outlook 2024.
Crediting the government’s financial incentives that resulted in reductions in the cost of ownership of electric 3Ws, the report said the sale of these vehicles in India increased by 65% with respect to 2022. One in five three-wheelers sold globally in 2023 was electric, and nearly 60% of those were sold in India, boosted by the Faster Adoption and Manufacturing of Electric Vehicles (FAME II) subsidy scheme, it added.
Almost 1 million electric 3Ws were sold in 2023, reflecting 30% growth compared to 2022. The market is highly concentrated, with China and India together accounting for more than 95% of all electric and 80% of conventional 3W sales, it said. Infact, E3W sales in China declined 8% in 2023, to 3,20,000, making the country the second-largest electric 3W market, it added.
The report argues that in 2023 in India, despite the upfront price being 55% higher than for its gasoline equivalent, the average electric 3W model (auto-rickshaw) is more than 50% cheaper to own after 8 years of service, and even without subsidies is over 40% cheaper.
“Even when considering the most cost-effective ICE 3W running on natural gas, the electric model achieves TCO parity as soon as two years after purchase, and works out about 40% cheaper over an 8-year lifetime. However, subsidies still play an important role, as without them, the TCO breakeven point is only reached after 4 years,” the report said.
These numbers do make one thing clear – strong policy support by the government for deployment of Electric Vehicles like the FAME II scheme, is critical to boost EV adoption and help the country curb harmful greenhouse gas emissions and achieve its climate goals.
Fig 1: An e-rickshaw in India. Image: Shutterstock
So what is the FAME scheme? FAME stands for Faster Adoption and Manufacturing of Electric Vehicles. The first version of the scheme came into effect in April 2015 for a two-year policy term, ending on 31 March 2017. Its term was later extended to 31 March 2019.
The FAME II scheme, with a budget outlay of Rs 10,000 crore, was introduced in 2019 for a period of three years. The scheme was targeted to support 7,000 e-buses, 5 lakh e-3 wheelers, 55,000 e-passenger cars and 10 lakh e-two wheelers. Later another Rs 1500 crore was allotted for the scheme. As of 30th March, 15,42,452 electric vehicles have been subsidised under the scheme. It includes 13,64,929 two-wheelers, 15,71,71 three-wheelers and 20,352 four-wheelers.
The government later came out with the Electric Mobility Promotion Scheme 2024 (EMPS 2024) to further accelerate the adoption of EVs in the country. This is a fund-limited scheme with a total outlay of Rs. 500 crore for the period of 4 months, w.e.f. 1st April 2024 till 31st July 2024, for faster adoption of electric two-wheeler (e-2W) and three-wheeler (e-3W) to provide further impetus to the green mobility and development of electric vehicle (EV) manufacturing ecosystem in the country.
Electric Three-wheeler Sales: Which Indian State Has The Edge
According to the Clean Mobility Shift EV dashboard, out of the total 10,72,214 three-wheelers (including non-electric) sold in 2023 across the country, 5,82,548 were electric 3Ws. Uttar Pradesh topped the list of states selling the most E3Ws, registering 2,32,595 units, followed by Bihar where 75,191 E3Ws were sold. Assam with 57,900 units and Rajasthan with 29,792 E3Ws bagged the third and fourth spots.
If one talks about 2024, more than 1.63 lakh E3Ws have already been sold across the country, with Uttar Pradesh again leading with 61,128 units, followed by Bihar with 20, 210 units, Assam with 14,040 units and Delhi with 9,821 units, according to the CMS EV dashboard which draws on data, in real time, from the Indian Government owned Vahan dashboard.
Fig 2: Electric vehicles sales data in 2023 on CMS EV Dashboard
What Does The IEA Report Say About Electric Two-Wheeler Sales In India
The report says around 1.3 million electric two-wheelers were sold in India and Southeast Asia in 2023, accounting for 5% and 3% of total sales, respectively. India is the second largest electric two-wheeler market worldwide. Its sales in 2023 grew by 40% compared to 2022.
“The Indian electric 2W market is dominated by the five largest domestic manufacturers (Ola Electric, TVS Motor, Ather, Bajaj and Ampere), which accounted for more than 75% of sales,” the report said. Leading from the front, around 1,67,773 E2Ws were sold in Maharashtra in 2023 followed by Karnataka where 1,33,640 such vehicles were sold. Gujarat sold 78,499 E2Ws and Tamil Nadu registered 78,422 unit sales.
Fig 3: People riding electric two wheelers. Image Ola
Experts believe that apart from urban India, there has been a turnaround in consumer sentiment in rural markets, pushing demand for electric two-wheelers. They argue that the higher running costs of traditional internal combustion engine vehicles, subsidised power, homegrown innovation, engineering, and manufacturing, combined with strong government support and myriad other factors have led to people in rural areas embracing the trend of owning two-wheeler EVs.
Electric Four Wheelers: What's the story in India
The report says that electric car registrations were up 70% year-on-year to 80 000 in India, compared to a growth rate of under 10% for total car sales. Around 2% of all cars sold were electric. It said that a lot of new models also became popular in 2023, such as Mahindra’s XUV400, MG’s Comet, Citroën’s e-C3, BYD’s Yuan Plus, and Hyundai’s Ioniq 5, driving up growth compared to 2022.
It opined that local carmakers have maintained a strong foothold in the market, supported by advantageous import tariffs, and account for 80% of electric car sales in cumulative terms since 2010, led by Tata (70%) and Mahindra (10%).
