Scaling Up Adoption of Electric Auto Rickshaws In India

E-auto sales in the country are predicted to reach 1,80,000 units per month by December 2030

Electric autos are one of the most popular modes of transportation at present in India. Be it passengers or goods, they offer a very affordable yet flexible and sustainable mobility solution that has become the preferred choice for last mile connectivity as well as carriage of goods within cities, in the process empowering a large section of people by providing livelihoods.

India recently overtook 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. Not only in India, these electric three-wheelers are also making their mark in other countries, with Indian Original Equipment Manufacturer (OEM) Piaggio Electric introducing them in the Philippines and Mahindra exporting them to Nepal.

Continued government support through incentives and subsidies have helped fast track this adoption even further. According to a report by the OMI Foundation, “April 2024 saw 52.38% of all new registered passenger autos as EVs, while in the case of three-wheeler goods carriers, 53.19% of all new registered vehicles were electric.” Going by this trend, experts believe that e-auto sales are predicted to reach 1,80,000 per month by December 2030.

Fig 1: Piaggio Vehicles unveiled their first three-wheeler passenger electric vehicle, the Ape E-city FX NE Max, in Tamil Nadu. Pic credit Shutterstock

What Are The Factors Driving Electric-Auto Rickshaws Adoption in India

FAME subsidy: The Government of India came out with the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) scheme in 2015 to boost the adoption of electric and hybrid vehicles. The first phase (with a budget of Rs 895 crore) was in effect from 2015 to 2019, while the second phase (with a budget of Rs 11,500 crore) was from 2019 to March, 2024. Through this, the government provided substantial subsidies to both the OEMs and end-users to make it a more affordable solution, and the preferred choice for mobility.
Electric Mobility Promotion Scheme (EMPS): After the FAME scheme ended in 2019, the government came out with the EMPS Scheme in March 2024 with an outlay of Rs 500 crore for four months. This scheme too is aimed to provide support to the two and three-wheeler segment to fast track the transition.
Support by different states: Most of the states across India have come out with forward looking EV policies, adding special focus on the faster adoption of electric two, three and four wheelers. Specific incentives like tax reduction, registration fee waivers and direct subsidies have been provided to this segment, specific to the requirement of these states. These policies have also mostly defined targets for adoption of these vehicles and creating the infrastructure needed, the report
Cost Factor in favour of e-auto adoption: Although buying an e-auto can be more expensive owing to its high upfront cost and “the average electric 3W model (auto-rickshaw) is more than 50% cheaper to own after 8 years of service”, the report said adding that “even when considering the most cost-effective ICE auto running on natural gas, the electric model achieves TCO parity as soon as two years after purchase, and works out to be about 40% cheaper over an 8-year lifetime.”
Environmental Concerns: The rapid growth of urbanisation and transportation has also led to a spike in air pollution and resultant health issues, making it an apt case for pushing the adoption of e-autos.

Also, the report added that the “lifecycle emissions for diesel and CNG auto-rickshaws stand at 177 grams of carbon dioxide equivalent (gCO2e) per vehicle km, equivalent to nearly 13 balloons filled with CO25 or a typical 100 watt light bulb running for 3.8 hours and 122 gCO2e of GHG emissions, equivalent to nearly 9 balloons or a typical 100 watt light bulb running for 2.6 hours, per vehicle km respectively.

“Since auto-rickshaws have a higher daily usage (vehicle kilometres travelled per day) as compared to other personal transport modes, a transition to e-autos can substantially reduce emissions of CO2 and other pollutants, and produce health benefits for urban inhabitants.”

Challenges To Adoption of Electric-Autos In India

Consistent hand-holding by the government and rising consciousness for sustainable solutions have helped India achieve quite a few milestones as far as electrification of its transportation is concerned. However, the road remains long and the report points out some key challenges that need to be addressed to further increase adoption and achieve 100% electrification. The most pertinent are:

Infrastructure limitations: Despite coming a long way, India still falls short of having an adequate number of charging stations. To add to it, their uneven distribution also helps increase range anxiety, thus impacting operations.
Battery Technology: The quality of a battery plays a crucial role in the performance in these e-autos and production of high quality cells need abundant availability of raw materials at a cheap rate. Unfortunately, this is not the case as OEMs have to face “scarcity and high cost of raw materials such as lithium-ion cells for batteries which increases the dependency on imports”.
Hurdles Faced by Financial Institutions: “Financiers face higher risks when financing three-wheelers due to five key factors: counterparty, product, operations, repossession, and residual risks, the OMI report The presence of multiple startups in the space also adds to the risk as “financiers fear these startups may default as market players consolidate.”.
Regulatory Framework: There is also a need to give a fillip to grassroot level initiatives like “lowering upfront costs, improving access to finance, and scrapping old autos” to overcome this challenge.

Fig 2: An E-rickshaw in Delhi. Photo by Subhash Barolia/Flickr.

What Can Be Done to Further Boost Adoption of Electric-Autos in India

One of the key recommendations that the report asserts is strengthening of the charging infrastructure to minimise range anxiety. This, it suggests, can be done through public-private partnerships, especially in the urban areas. Another way to boost the adoption is by focussing on alternatives like battery swapping stations.

Another key suggestion is to encourage research and development in battery technology, whose evolution in recent years has “affected consumer sentiment positively, resulting in a rise in demand for e-autos for goods and passenger services”. It says continued investment in R&D, especially in areas like battery innovation, focusing on strong industry-academia-government partnerships, is needed to produce affordable and lightweight batteries with extended lifespans, it added.

The report also advocates for greater need to ensure lower cost of borrowings of these vehicles while stressing that focus should also be on De-Risking Measures that can bring down risk premiums and make lending more favourable through a variety of outcomes. The report also stresses on having a supporting regulatory environment.

The report concludes by saying that “Governments should focus on options to favour e-autos, such as streamlining the permit system and increasing the number of permits. Stringent emission standards for petrol and diesel autos can be implemented at the state level, starting with non-attainment cities. OEMs, aggregators, and fleet operators can participate in a domestic carbon market, ensuring benefits from fleet-level decarbonisation and lower electric three-wheeler prices.”.

Sr. No	Vehicle segment	Incentive available	Number of vehicles to be incentivised	Maximum incentive per vehicle
1	e-2W (L1 & L2)	INR 5000/kwh	1,00,000	10,000
2	e-3W autos (L5M)	INR 5000/kwh	15,000	30,000
3	e-3W goods carrier (L5N)	INR 5000/kwh	10,000	30,000
4	e-4W cars (M1)	INR 5000/kwh	10,000	1,50,000
5	e-4W goods carrier (N1)	INR 5000/kwh	10,000	1,00,000
6	e-buses* (SRTu)	10% vehicle cos (ex factory)	1000	20,00,000

Road Tax / Vehicle Registration Fees	Manufactured within the State	Manufactured outside the State
Exemption on Road Tax	100% exemption for first 10,000 buyers 75% exemption for 10,001-15000 buyers 25 % exemption after 15000 buyers upto policy period	25% upto policy period
Exemption from Vehicle Registration Fees	100% exemption for first 10,000 buyers 75% exemption for 10,001-15000 buyers 25 % exemption after 15000 buyers upto policy period	25% upto policy period

S No	Type of PCS/SPCS	Incentive amount	Maximum Incentive available per PCS/SPCS	Max number of PCS/SPCS to be incentivised
1	Slow	60% of the cost	INR 10,000	15,000
2	Moderate/Fast	50% of the cost	INR 5,00,000	500
3	Solar Based fast#	70% of the cost	INR 7,00,000	500

Type of Unit	Max Limit	Max Admissible Subsidy
Micro	30% of FCI	Rs 2 Cr
Small		Rs 7 Cr
Medium		Rs 15 Cr
Non MSME		Rs 30 Cr

Sr No	Vehicle Segment	Incentives
1	Assured Buyback,	6% of total vehicle cost capped at INR 10,000/-
2	Battery warranty of at least 5 years	4% of total vehicle cost capped at INR 6,000/-

Scaling Up Adoption of Electric Auto Rickshaws In India

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5 kWh

Vehicle Category	Incentive	Maximum Incentive	Number of Electric Vehicles to be incentivized
e-Bicycle	Upfront: 25% of Cost of Bicycle	Rs. 3,000	First 25,000 Bicycle purchased during the policy period
e-2W	Upfront : Fixed Battery: Rs. 5,000/kWh Swappable Battery: Rs. 3000/kWh Scrapping : Rs 5,000	Rs. 30,000 Rs. 15,000 Rs. 5,000	First 10,000 vehicles registered during the policy period
e-Cart	Upfront : Fixed Battery: Rs. 5000/kWh Swappable Battery: Rs. 3000/kWh Retrofit Kit: 15% of cost	Rs. 30,000 Rs. 10,000 Rs.10,000	First 1000 e-Carts registered during the policy period
e-Autos	Upfront : Fixed Battery: Rs. 5000/kWh Swappable Battery: Rs. 3000/kWh Retrofit Kit: 15% of cost Scrapping : Rs 7,500	Rs. 30,000 Rs. 15,000 Rs. 15,000 Rs. 7,500	First 1000 e-Autos registered during the policy period
e-Goods Carrier L5N	Upfront : Fixed Battery: Rs. 5000/kWh Retrofit Kit: 15% of cost Scrapping: 15,000	Rs. 50,000 Rs. 15,000 Rs. 15,000	First 1000 Goods Carrier L5N registered during the policy period
e-Goods Carrier N1	Upfront: Fixed Battery: Rs. 5000/kWh Retrofit Kit: 15% of cost Scrapping: 15,000	Rs. 80,000 Rs. 25,000 Rs. 15,000	First 1000 Goods Carrier N1 registered during the policy period
4 W- e-Cars (Personal)	Upfront: Fixed Battery: Rs. 5,000/kWh Scrapping: 7000	Rs. 1,50,000 Rs. 7,000	First 2000, 4 W- e-Cars (Personal) (including Hybrids as defined in FAME II) registered during the policy period. Applicable only for vehicles with ex showroom price below INR 20 lakhs
4 W- e-Cars (Commercial)	Upfront: Fixed Battery: Rs. 10,000/kWh Scrapping: 7000	Rs. 2,00,000 Rs. 7,000	First 1000, 4 W- e-Cars (Commercial) (including Hybrids as defined in FAME II) registered during the policy period

Vehicle Category	Early Bird Incentive	Maximum Early Bird Incentive
e-Bicycle	Rs. 2000	Rs. 2,000
e-2W, e-Cart, e-Autos, e Goods Carrier (L5N and N1), e-4W (personal & commercial)	Rs 3,500/kWh	Rs. 50,000

Category	Incentive	Maximum Incentive
Private Charging	Infrastructure Incentive: Grant on purchase and installation of charging equipment	Rs. 6,000	Only for the first 30,000 private chargers installed during the policy period.
Public Charging	Reimbursement of GST paid 100% reimbursement of GST paid on the Fast Charging/Swapping Electric Vehicle Supply Equipment (EVSE) procured by private enterprises/individual	Rs. 50,000	Only for the first 50 fast charging /Swapping EVSE installed during the policy period. (Will not be applicable on Chargers under Central Subsidy)
	Upfront electricity infrastructure: Upfront cost on infrastructure for bringing power supply to Electric Vehicle Charging Station	Rs. 5,00,000	Only for the first 50 Public fast Charging/Swapping Stations installed in the state during the policy period. (Will not be applicable on Chargers under Central Subsidy)
	Electricity Duty Exemption: 100% Electricity duty exemption for Public Charging and Swapping stations	For policy period	For policy period

Sr. No	Classification of EV	2022-23	2023-24	2024-25	2025-26	2026-27	Total
1	2W	2,000	8000	20,000	54,000	85,000	1,69,000
2	3W	200	800	2000	4,000	10,000	17,000
3	4W(Non Commercial)	100	400	1400	3,000	7,000	12,000
4	4W(Commercial)	10	40	100	300	650	1,100
5	Buses	10	25	65	200	600	900
	Total						2,00,000

Sr No	Vehicle segment	Ceiling for Early Bird	2023 – 2027
1	2W	35	172
2	3W(E-Rickshaw/ E-Cart)	10	40
3	3W	10	40
4	Car(Including Taxis)	40	167
5	Bus	11	49
6	E-4w ([CV, Stage Carriage/Maxi Cabs)	10	41
Total	–	116	509

Sr No	Vehicle Segment	Subsidy (Whichever Is Lower)	Maximum ExShowroom Price to Avail (INR)
1	Two-Wheeler	10% of the Ex-Showroom Price or INR 15,000	1,50,000
2	Three-Wheeler – e Rickshaw / e-cart	10% of the Ex-Showroom Price or INR 30,000	3,00,000
3	Three-Wheeler	10% of the Ex-Showroom Price or INR 50,000	5,00,000
4	Car	10% of the Ex-Showroom Price or INR 2,50,000	25,00,000
5	Bus	25% of the Ex-Showroom Price or INR 50,00,000	2,00,00,000
6	E-4w ([CV, Stage Carriage/Maxi Cabs)	10% of the Ex-Showroom Price or INR 3,00,000	30,00,000

Sr No	Vehicle Segment	Subsidy (Whichever Is Lower)	Maximum ExShowroom Price to Avail (INR)	No of EVs to be subsdised
1	Two-Wheeler	20% of the Ex-Showroom Price or INR 60,000	1,50,000	28
2	Three-Wheeler – e Rickshaw / e-cart	20% of the Ex-Showroom Price or INR 60,000	3,00,000	10
3	Three-Wheeler	20% of the Ex-Showroom Price or INR 1,00,000	5,00,000	10
4	Car	20% of the Ex-Showroom Price or INR 5,00,000	25,00,000	33
5	Bus	50% of the Ex-Showroom Price or INR 1,00,00,000	2,00,00,000	11
6	E-4w ([CV, Stage Carriage/Maxi Cabs)	20% of the Ex-Showroom Price or INR 6,00,000	30,00,000	9
Total				101

Sr No	Vehicle segment	Number of EVs	State subsidy
1	2W	100	Rs.10,000/- per Kwh of battery capacity subject to a maximum of Rs.30,000/- per vehicle.
2	3W	50	Rs.10,000/- per Kwh of battery capacity subject to a maximum of Rs.50,000/- per vehicle.
3	4W	50	Rs.10,000/- per Kwh of battery capacity subject to a maximum of Rs.2,00,000/- per vehicle

Sr. No	Owner of PCS	Subsidy
1	Retail Outlet of Oil Marketing Companies	15% of the cost of putting up Public Charging Infrastructures and Stations will be reimbursed by the State Govt. in the form of subsidy/ incentive.
2	Local Entrepreneurs	25% of the cost of putting up Public Charging Infrastructures and Stations will be reimbursed by the State Govt. in the form of subsidy/ incentive

Category of vehicle	% Of subsidy	The maximum amount of subsidy
Electric Two-wheelers	15%	Rs. 5000/-
Electric Three-wheelers	15%	Rs.12,000/-
Electric Four Wheelers	15%	Rs. 1,00,000/-

Criteria	Threshold Value
Min. top speed	40km/hour
Min. acceleration	0.65m/s2
Max. electric energy consumption	Not exceeding 7kWh/ 100km
Warranty	At least 3 years comprehensive warranty including that of battery from the manufacturer

Criteria	Threshold value
Min. top speed	40 km/hr
Min. acceleration	0.65 m/s2
Max. electric energy consumption Not exceeding	7 kWh/100km
Warranty	At least 3 years comprehensive warranty including that of battery from the manufacturer

EV Segment	Demand Incentives
Electric 2-wheeler	Purchase incentive of Rs. 5,000/- per kWh of battery capacity; Maximum incentive of Rs. 30,000/- per vehicle Incentive for scrapping and de-registering old ICE two wheelers registered in Delhi: Up to Rs. 5,000/- of the incentive shall be reimbursed by the GNCTD All delivery service providers shall be expected to convert 50% of their fleet operating in Delhi to electric by 3V March, 2023 and 100% by 31st March, 2025.
E-Autos	Open permit system shall be applicable & be given on first-come-first-serve basis; no cap on permits issued to e-autos in Delhi Purchase Incentive of Rs. 30,000/- per vehicle shall be provided by GNCTD Interest subvention of 5% on loans and/or hire purchase scheme for the purchase of an e-auto Incentive for scrapping and de-registering old ICE auto rickshaws registered in Delhi: Up to Rs. 7,500/- of the incentive shall be reimbursed by the GNCTD The auto-rickshaw permits linked to the de-registered ICE vehicle can be surrendered and exchanged for an e-auto permit at no additional cost.
E-rickshaws & E-carts	Purchase Incentive of Rs. 30,000/- per vehicle shall be provided by GNCTD Interest subvention of 5% on loans and/or hire purchase schemes Buses
E-buses	Pure electric buses shall constitute at least 50% of all new stage-carriage buses (i.e., for all public transport vehicles with 15 seats or more) procured for the city fleet including for last-mile connectivity Induction of 1000 pure electric buses by 2020
Goods Carriers	A Purchase Incentive of Rs. 30,000/- to the first 10,000 e-Carriers to be registered in Delhi after the issuance of this policy. Interest subvention of 5% on loans and/or hire purchase schemes. Incentive for scrapping and de-registering old ICE goods carriers registered in Delhi: Up to Rs. 7,500/- of the Incentive shall be reimbursed by the GNCTD Goods carriers (i.e., L5N and N1 type)
Four wheeler	Purchase Incentive of Rs. 10,000/- per kWh of battery capacity Maximum incentive of Rs. 1,50,000/- per vehicle to the registered owners of the first 1000 e-cars to be registered in Delhi after the issuance of this policy

Vehicle Segment	Max vehicle to be supported	Approx. battery size	Approx incentive @10,000 per kWh
Electric 2 wheeler	24,000	2 kWh	20,000/-
Electric 3 wheeler	70,000	5 kWh	50,000/-
Electric 4 wheeler	4000	15 kWh	150,000/-
4 wheeler (SHEV)	1000	1.3 kwh	13,000/-
Electric bus	1000	250 kwh	25,00,000/-

Vehicle Segment	Incentive Available ( INR)	No. of Vehicles to be Incentivized	Maximum Incentive per Vehicle (INR)
Electric Two Wheeler (L1 & L2)	5000/kwh	1,00,000	10,000
Electric 3 Wheeler autos (L5M)	5000/kwh	15,000	30,000
Electric 3 Wheeler goods carrier (L5N)	5000/kwh	10,000	30,000
Electric 4 Wheeler cars (M1)	5000/kwh	10,000	1,50,000
Electric 4 Wheeler goods carrier (N1)	5000/kwh	10,000	1,00,000
Electric buses	10% of vehicle Cost	1,000	20,00,000

Vehicle Segment	Scrappage Incentive
Electric Two-Wheeler	INR 7,000
Electric Three-Wheeler	INR 15,000
Electric Four Wheeler	INR 25,000

Incentives Description	Incentives
Assured Buyback	6% of total vehicle cost capped at INR 10,000/-
Battery warranty of at least 5 years	4% of total vehicle cost capped at INR 6,000/-

CHARGING STATION	Incentive
Small Charging Stations	Capital Subsidy of 25% of the value of the charging equipment/machinery for first 300 charging stations up to a Maximum subsidy of INR 1,50,000
Medium Charging Stations	Capital Subsidy of 25% of the value of the charging equipment/machinery for the first 100 stations up to a Maximum subsidy of INR 2,00,000.
Large Charging Stations	Capital Subsidy of 25% of the value of the charging equipment/machinery for the first 100 stations up to a Maximum subsidy of INR 10,00,000.

Vehicle Segment	State Subsidy Amount (in Rs.)	Max ex-factory price to avail incentive (in Rs.)
2 wheeler	Rs. 10,000/- per kWh	1,.50,000
3 wheeler	Rs. 10,000/- per kWh	5,00,000
4-Wheeler	Rs. 10,000/- per kWh	15,00,000

Vehicle Segment	Battery Size in KWH (approx.)	State Subsidy Amount(Rs.)	Total State Subsidy (Rs.)	Maximum ex-factory price to avail incentive (Rs.)
Electric Two wheeler	2 KWH	10000/- per kWh	20000/-	1,50,000
Electric Three wheeler	5 KWH	10000/- per kWh	50000/-	5,00,000
Electric Four wheeler	15 KWH	10000/- per kWh	150000/-	15,00,000