Policies to Promote the Integration of Electric Two-and-Three-Wheelers

Measures to promote the uptake of electric two-and-three-wheelers include tax incentives, purchase subsidies, the development of charging infrastructure and regulatory frameworks that encourage the production and use of these sustainable vehicles.

The integration of electric two-and-three-wheelers into the market, together with appropriate policies and regulations, is crucial to facilitate a smooth transition to E-Mobility.

Fuel consumption caps or fuel economy requirements

One of the best policies to promote electric two-and-three-wheelers is to set fuel economy standards or limits for these vehicles.

For direct comparison with gasoline-powered vehicles, the energy consumption of electric vehicles can also be expressed in ‘liters of gasoline-equivalent’ units.

Traffic in India. Tripadvisor (n.d.)

In China, two-wheelers must meet fuel consumption requirements ranging from less than 2 liters per 100 km to more than 8 liters per 100 km, depending on engine size, and three-wheelers must meet slightly higher standards.

Rationalization of vehicle taxes

The main objective of rationalizing vehicle taxes is to shift the financial responsibility for owning and operating vehicles, including environmental and infrastructure costs, to less fuel-efficient vehicles.

It is advisable to rationalize vehicle taxes and fees by reducing them for lighter, more efficient vehicles and increasing them for larger, less efficient vehicles to encourage the adoption of efficient vehicles such as electric two-and-three-wheelers.

In Thailand, the excise tax on electric motorcycles has been set at 1%. For conventional motorcycles, the excise tax is based on CO2 emissions and increases progressively as CO2 g/km emissions increase.

Tuk-Tuks in the street. Shuttershock (2019)

Rationalizing insurance

Insurance prices should be modified to favor lighter, slower vehicles, because they are less likely to damage other cars and people on the road and cause less pollution. This is like rationalizing vehicle taxes and charges.

Because electric two-and-three-wheelers and other vehicles have fewer externalities than their combustion engine counterparts, their insurance costs should be lower.

In some circumstances, such as for electric two-wheelers with a top speed of 25-50 km/h, it would even make sense for the government to pay for universal basic insurance with the extra money raised from the higher insurance payments (premiums) of the faster, heavier vehicles.

Support for manufacturing and consumer purchases

Larger economies in Southeast Asia, such as Indonesia, Malaysia, the Philippines, Thailand and Vietnam, have historically supported domestic vehicle production and assembly through fiscal and non-fiscal policies, which has led to rapid expansion in recent years.

Many countries have vehicle manufacturing roadmaps and offer incentives, subsidies and instructions to companies, mostly foreign, to start or expand local production and assembly.

Similar or better fiscal and non-fiscal support for local manufacturers should be developed to encourage the growth of electric two-and-three-wheelers.

As electric two-and-three-wheelers are set to take the lead globally, relevant government departments should coordinate to support research and development, local production and assembly of these vehicles.

Targeted consumer subsidy schemes for electric two-and-three-wheelers can play a crucial role in promoting their adoption, for example in India, especially for e-commerce and passenger transport. These subsidies can make electric vehicles (EVs) more affordable for consumers and help accelerate the transition from fossil fuel-powered vehicles to cleaner and more sustainable alternatives. Below are some examples and considerations for implementing such subsidy schemes:

E-commerce delivery fleets

Subsidized purchase

Provide direct subsidies or incentives to e-commerce companies or individual delivery partners to purchase electric two-and-three-wheelers.

Bulk purchase incentives

Offer additional discounts or incentives for bulk purchases of electric vehicles by e-commerce companies.

Charging infrastructure

Subsidize the installation of charging infrastructure at e-commerce warehouses or delivery hubs to support electric vehicle fleets.

Passenger transport services

Subsidized loans

Provide low-interest or interest-free loans for purchasing electric three-wheelers used for passenger transport, such as e-rickshaws.

Vehicle scrappage incentives

Offer incentives or subsidies to replace old and polluting gasoline-powered three-wheelers with new electric models.

Training programs

Subsidize training programs for drivers to familiarize them with electric vehicle operations, maintenance, and safety.

Two-and-three-wheelers in the streets of India. Telegraph India (2019)

Two-and-three-wheelers in urban public transport

In many Southeast Asian cities, motorcycles and three-wheeled taxis account for a significant proportion of traffic. Many people rely on motorcycles and three-wheelers as their primary means of transport or for last-mile connectivity, especially those in low-income groups.

Motorcycles and three-wheeled taxis are also the primary source of livelihood for many people in Southeast Asia, both in urban and rural areas.

These modes of transport should be effectively integrated into the city’s public transport network, taking into account efficiency, connectivity and safety concerns.

Infrastructure for two-and-three-wheelers

In a few countries, notably Malaysia and Indonesia, there is already a significant “motorcycle-only” infrastructure. This infrastructure separates motorcycles from road vehicles, allowing them to avoid dangerous junctions, take alternative routes across rivers and use motorways.

This provides a strong incentive for their use, while significantly improving the safety of these vulnerable vehicles. It should be stressed that their lanes should always have priority over other vehicles.

Conclusion

The introduction of effective policies for the integration of electric two-and-three-wheelers is crucial for sustainable transport. The introduction of maximum fuel consumption limits, fuel efficiency requirements, streamlined insurance regulations and dedicated infrastructure can encourage adoption. These policies will not only reduce emissions and dependence on fossil fuels, but will also increase the accessibility and affordability of electric vehicles, thus promoting a greener and more inclusive mobility ecosystem.