India, China, and ASEAN countries dominate the global two and three wheeler markets. In 2023, sales in these regions hit 19 million, 17 million, and 14 million units respectively.
Indonesia, Vietnam, the Philippines, and Thailand lead within ASEAN, with Two and Three Wheeler sales surpassing light-duty vehicles. Despite a global decline in electric two wheeler sales, India and ASEAN countries bucked the trend, driven by robust policy support and substantial subsidies.
India’s Market Flourishes
India, the world’s second-largest market for electric two wheelers, saw sales grow by 40% in 2023, reaching 880,000 units. The market is dominated by major domestic manufacturers like Ola Electric, TVS Motor, and Bajaj, which together accounted for over 75% of sales. The growth is largely attributed to the FAME II policy, a three-year purchase incentive scheme that ended in March 2024, and its successor, the Electric Mobility Promotion Scheme (EMPS). EMPS, announced in March 2024, allocated nearly USD 60 million to subsidize the purchase of 372,000 electric 2/3Ws equipped with lithium-ion batteries.
ASEAN Countries Embrace Electric Mobility
ASEAN countries, particularly Indonesia, Vietnam, the Philippines, and Thailand, also reported notable increases in electric 2/3W sales. Vietnam emerged as the most dynamic market, with electric two wheelers comprising 9% of total sales, despite a decrease to 250,000 units in 2023. Home-grown manufacturers such as VinFast and Pega are leading the charge, with production capacities exceeding domestic demand, allowing for export potential within the region.
Indonesia is making significant strides with a USD 455 million subsidy program aimed at boosting domestic electric motorcycle production and sales, targeting 800,000 new electric motorcycles and the conversion of 200,000 conventional ones.
Global Market Trends and Challenges
Globally, electric two wheeler sales declined by 18% in 2023, primarily due to supply chain disruptions in China, which saw a 25% drop in sales. Despite this, China remained the largest market, accounting for 78% of global electric 2W sales with nearly 6 million units sold.
Electric three wheelers (3Ws) saw a global sales increase of 13%, with nearly 1 million units sold in 2023. India surpassed China to become the largest market for electric 3Ws, with sales soaring by 65% to over 580,000 units, driven by government incentives that reduced the total cost of ownership.
Future Prospects and Policy Impact
The shift towards electrification in the 2/3W segment is supported by various policy measures and subsidies aimed at reducing the cost of electric vehicles (EVs). In India, the average electric 2W, despite being 30% more expensive upfront than its internal combustion engine (ICE) counterpart, is over 40% cheaper to own over five years. Similarly, electric 3Ws offer significant cost savings over their gasoline and natural gas equivalents, with the total cost of ownership reaching parity or becoming cheaper within a few years of purchase.
As countries continue to implement supportive policies and invest in sustainable transportation infrastructure, the electric 2/3W markets in India, ASEAN, and beyond are poised for continued growth, contributing to global efforts to decarbonize transportation and improve urban air quality.
INFORMATIVE | Smart Glass Windows: Revolutionizing the Future of Driving
