LSEV Market Overview
The global LSEV market attained a size of $35.2 billion in 2017 and is forecasted to reach $68 billion by 2025, registering a CAGR of 8.2% during 2018–2025. The major factors driving the market growth are increasing environmental awareness, initiatives and subsidies offered by the governments, and declining electric vehicle battery costs.
The electric vehicles considered in this study do not have an internal combustion engine, and solely use electric energy for propulsion. The electricity is stored on board within a rechargeable battery, which is used to drive one or more motors in tacked in the vehicle. These vehicles do not pollute the environment and generate very less noise. These environment sustainability attributes of these vehicles have impacted the dynamics of LSEV market.
Based on product, the LSEV market is categorized into two-wheelers, three-wheelers, and four-wheelers. Among these, two-wheelers was the largest category, accounting for more than 90% of market revenues in 2017. This can be attributed to their high use as personal transport vehicles. However, electric three-wheeler is expected to be the fastest growing category in the market during the forecast period.
By type of two-wheeler, the market is categorized into electric scooter, motorcycle, bikes, kick scooter, and mono wheel. Among these, electric bikes held the largest share in the LSEV market revenues in 2017. Electric scooters can reach top-speeds of 25-50km/hr, and are comfortable for long distance commuting. These characteristics of electric scooters, coupled with their lower price when compared to electric motorcycles, would continue to drive their market growth during the forecast period.
On the basis of voltage, the LSEV market is categorized into 24V, 36V, 48V, 60V, and 72V. Among these, the 48V category held the largest revenue share in the market, valued at more than 40% in 2017, due to its popularity in electric scooters. However, the fastest growth during the forecast period is expected from the 72V category, due to increasing demand for high-speed micro electric cars and electric scooters, which prefer this voltage.
Globally, Asia-Pacific is the largest LSEV market, contributing the largest share in revenue sales, valued at more than 65%, in 2017. The LSEV market in North America and Europe are small, due to low preference for scooters and motorcycles in these regions. China is the leading market for the sales of all LSEV types – two-wheelers, three-wheelers, and four-wheelers. The early introduction of LSEVs in the country and support from the government have made China the largest electric vehicle market, both globally and in Asia-Pacific.
Dynamics of LSEV Market
The major players in the industry are leaning towards the use of Li-ion batteries in LSEVs, overlooking the SLA batteries, which were being used in such types of vehicles until recently. When compared to Li-ion batteries, SLA batteries have considerably lower initial cost and are still the preferred choice for consumers. But, in the long run, Li-ion batteries are better than SLA batteries. The Li-ion batteries are lighter in weight and smaller in size as compared to SLA batteries, making it the preferred choice for use in vehicles.
Moreover, the accelerated Li-ion battery production and the decline in its prices in the recent years due to advancements in battery technology have made its penetration into the LSEV market easier. Also, SLA batteries are harmful as they pose a threat to human health when not correctly disposed. For instance, in China, the government shut down over 80%of the SLA battery manufacturing facilities in 2011, with others suspended. Since then, the key players in the market are shifting from SLA batteries to Li-ion batteries.
The key growth driver for the electric three-wheeler market is government incentives in the form of subsidies and grants in addition to growing environmental concerns. Governments, especially of APAC countries, aim to completely electrify passenger vehicles in the public transport system. In an effort toward this, they are providing support in the form of incentives to encourage the adoption of electric vehicles. For instance, in India, the government is providing subsidies ranging from $370 (INR 25,000) to $910 (INR 61,000) under its FAME-India electric mobility scheme.
Also, since much of the air pollution is caused by conventional passenger carriers used for transportation purposes, environmental authorities in APAC are taking initiatives to spread awareness on environmental sustainability and encouraging the adoption of emission-free electric vehicles. Since three-wheelers are an integral part of public transport, especially in Asian countries like India and China, their electrification can help address environmental concerns, thus driving their market growth.
The long charging time of electric three-wheelers is a major factor restraining their market growth. With the long charging time comes the issue of range anxiety. Also, the inadequate number of charging stations further adds to the woes of the end users. A conventional fuel-based three-wheeler user can go to a gas station and add fuel for a run of around 200 miles in about five minutes; this, however, is not possible for an electric three-wheeler user. It usually takes about six-to-eight hours for an electric three-wheeler to get charged to run for around 40 miles of range.
Besides, the fast charging technology that is currently available in the market is quite expensive. Thus, the factor of long charging time impedes the growth of the electric three-wheeler market.
LSEV Market Competitive Landscape
Some of the major players operating in the LSEV industry are Terra Motors Corporation, Zero Motorcycles Inc., Changzhou Yufeng Vehicle Co. Ltd., Jiangsu Kingbon Vehicle Co. Ltd., Hero Electric Vehicles Pvt. Ltd., Jiangsu East Yonsland Vehicle Manufacturing Co. Ltd., ZHIDOU Electric.