India surpasses China as the largest market for electric three-wheelers, reports IEA

The International Energy Agency's (IEA) latest Global EV Electric Vehicle Outlook reveals India's remarkable ascent as the foremost market for electric three-wheelers (3Ws), surpassing China in 2023 with over 580,000 sales. The report underscores the country's burgeoning electric vehicle (EV) landscape, driven by substantial government incentives and policy support.

According to the IEA, the surge in electric vehicle sales remains robust globally, fueled by the rapid growth of major emerging economies and advancements in key markets. Electric car sales are projected to continue their upward trajectory, potentially reaching around 17 million in 2024, constituting more than one-fifth of all cars sold worldwide.

In India, the electric vehicle market witnessed significant milestones in 2023. Notably, approximately 1.3 million electric two-wheelers were sold in India and Southeast Asia, representing 5 per cent and 3 per cent of total sales, respectively. Moreover, one in five three-wheelers sold globally in 2023 was electric, with nearly 60 per cent of these sales originating from India, buoyed by the government's Faster Adoption and Manufacturing of Electric Vehicles (FAME II) subsidy scheme.

The report highlights India's dominance in the electric 3W segment, with sales surpassing those of China. India's electric 3W market witnessed a 65 per cent surge in sales compared to 2022, reaching over 580,000 units in 2023. This growth can be attributed to government incentives and a consequent reduction in the cost of ownership of electric 3Ws. Conversely, sales in China experienced an 8 per cent decline in 2023, with 320,000 units sold, relegating the country to the second-largest electric 3W market.

India, along with China and ASEAN countries, emerges as a global leader in the two- and three-wheeler (2/3W) market. In 2023, these markets collectively accounted for staggering sales figures, indicating a significant shift towards electric mobility.

The IEA report also highlights India's strides in electric two-wheeler sales, marking a 40 per cent growth compared to 2022. The market is predominantly dominated by five major domestic manufacturers, which collectively command over 75 per cent of sales.

Furthermore, the report sheds light on India's EV policy landscape, emphasizing the critical role of government initiatives such as the FAME II scheme and the Production Linked Incentives (PLI) scheme in driving EV adoption. However, concerns loom over the potential impact of subsidy reductions in future policies, which could influence growth trends.

Aarti Khosla, Director of Climate Trends, hails India's leadership in electric 3W sales as a significant achievement, emphasizing the pivotal role of these vehicles in decarbonizing last-mile connectivity and small goods deliveries.

The IEA report underscores the imperative for a comprehensive transition to electric mobility, extending beyond two- and three-wheelers to encompass other vehicle segments, including trucks, to achieve climate change goals.

Amit Bhatt, MD at the International Council on Clean Transportation, emphasized India's rising momentum of transportation electrification, led by two- and three-wheelers. While acknowledging the economic benefits of battery electric vehicles, he stressed the necessity of extending this transition to trucks to significantly impact climate change. A recent ICCT report suggests that India must electrify its entire vehicle fleet, including trucks, by 2050 to achieve the net-zero target set for that year.