India Retains Top Spot In Electric Three-Wheeler Market Amid Global Slowdown: IEA

India has maintained its position as the world’s largest market for electric three-wheelers for the second consecutive year, according to the International Energy Agency’s (IEA) Global EV Outlook 2025.

Despite a contraction of 5 per cent in the overall global three-wheeler (3W) market, electric 3W sales rose by more than 10 per cent globally, crossing the 1 million unit mark in 2024, reported PTI.

India played a major role in driving this growth, recording a nearly 20 per cent increase in electric 3W sales, which touched approximately 7 lakh units during the year.

The IEA noted that electric three-wheelers made up almost 25 per cent of total 3W sales worldwide in 2024, up from 20 per cent the year before. Together, India and China continued to dominate the market, accounting for over 90 per cent of combined electric and conventional 3W sales. While China’s electrification progress has plateaued at under 15 per cent for the past three years, India pulled ahead in 2023 and extended its lead in 2024.

According to the report, “This translated into a record 57 per cent electric sales share in 2024, 3 per cent up on the previous year.” The surge in adoption is expected to continue under the new PM E-DRIVE scheme, which allocated funding in 2024 to deploy more than 3 lakh electric 3Ws for commercial operations. The total 3W fleet (both electric and internal combustion engine) in India was estimated at over 10 million vehicles in 2023.

Electric Two-Wheelers Gain Ground With More Players and Policy Support

The report also highlighted the increasing momentum in India’s electric two-wheeler (2W) segment. In 2024, India had 220 original equipment manufacturers (OEMs) in the electric 2W space, a rise from 180 in the previous year. Despite the high number of players, the four leading brands accounted for 80 per cent of the 1.3 million electric 2Ws sold, equal to 6 per cent of the total 2W market.

Although electric 2Ws still come with a higher upfront cost compared to conventional models, intensified competition has led to the launch of more affordable options. For instance, Ola, the Indian market leader, introduced its S1X entry-level scooter with a 2 kWh battery and 6 kW peak power at a price of Rs 70,000. “Policy support is also helping to bridge the affordability gap between electric and ICE 2W models,” the IEA observed.

This support comes under the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) policy, which extends incentives earlier provided under FAME-II and the Electric Mobility Promotion Scheme. The scheme offers subsidies of up to Rs 5,000/kWh for 2Ws equipped with lithium-ion batteries. It also includes provisions for 3Ws and other non-car EV categories. With a total budget of $1.3 billion, the initiative aims to facilitate the rollout of 2.5 million electric 2Ws by March 2026—more than doubling the 1 million target set under FAME-II.

India’s top 80 electric 2W manufacturers had a combined production capacity of 10 million units in 2024—eight times the domestic sales volume. If announced expansion plans are executed, this could grow to 17 million units in the near term.

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Electric Cars and Buses Show Gradual Uptick

India’s electric car market also witnessed a modest increase, with total sales approaching 1,00,000 units—representing 2 per cent of the market in 2024. The first quarter of 2025 saw a 45 per cent year-on-year jump, reaching nearly 35,000 units.

Despite the presence of Chinese EV brands in the Indian market, their share remained below 15 per cent in 2024 due to high import tariffs and the availability of competitively priced local alternatives. Notably, the MG Comet EV by Chinese OEM SAIC, priced under $8,000, was the cheapest battery electric car in India. However, on average, imported Chinese BEVs cost double compared to locally manufactured models. “In 2024, all battery electric vehicle (BEV) models manufactured by Indian carmakers started below $20,000, while none of the imported Chinese BEV models were priced under that threshold,” the IEA noted.

Additionally, the average price gap between battery electric and internal combustion engine (ICE) cars narrowed to under 15 per cent for small vehicles and 25 per cent for SUVs in 2024.

Electric buses also saw strong growth, with the fleet expanding from fewer than 3,000 units in 2020 to over 11,500 by the end of 2024. This marks a substantial shift in India’s public transportation landscape.

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