The Global Market of Electric Two-and-Three-Wheelers

Inventors patented the first electric bicycles in the 1890s. But their innovations never received the same attention as other early milestones in transportation, including the first subways and the Model T Ford, a low-cost car produced by Ford Motor Company. Today, however, several trends are converging to bring electric two-and-three-wheelers out of the darkness.

Market for small-format EVs

Sales of electric vehicles (EVs) are rising as governments crack down on emissions. Meanwhile, innovators have introduced new technologies and business models that are breathing life into the market for small-format EVs (those with two or three wheels). Improbable as it may seem, e-bikes may finally be here to stay.

Conventional bike. Unsplash (n.d.)

To gain more insight into the market, we looked at global trends for small electric vehicles, examining both geographic growth patterns and the forces shaping the industry. The analysis shed light on strategies to help original equipment manufacturers (OEMs) and other players succeed as small-format EVs gain traction.

The sales figures for small-format EVs may appear modest at first glance. The market for electric two-and-three-wheeled vehicles was valued at around $97 billion, or 4 percent of global car sales. However, the sector has momentum and global sales of electric two-and-three-wheelers are growing at more than 14 percent per year.

It’s impossible to generalize about global sales trends, as transport patterns and preferences vary widely from place to place, but some country-specific developments are striking. China, for example, now accounts for around 30 percent of the global market for small electric vehicles. What’s more, over 80 percent of China’s two-wheelers are electric, making it by far the dominant market in this category.

E-Bike. Unsplash (n.d.)

India sells by far the largest number of electric three-wheelers, which now account for about half of all rickshaws in the country. By 2026, around 80 percent of India’s three-wheelers will be electric, and as more light commercial vehicles are electrified, they could become the default option for freight transport as their performance and economics improve.

Globally, electrification will accelerate most rapidly in the scooter and light motorcycle segments. Electrification of heavy motorcycles will follow, but won’t reach the levels of smaller vehicles.

Most electric two-and-three-wheelers today rely on relatively cheap lead-acid batteries. However, regulatory changes could force a switch to lighter lithium-ion batteries, which offer higher energy density and therefore greater range.

Three-wheelers in India. Unsplash (n.d.)

Conclusion

The electrification of two-and-three-wheelers is gaining momentum worldwide, especially in emerging markets. In this competitive but exciting market, established OEMs and start-ups will find value creation opportunities, and other industry players could also see strong growth