India Electric Rickshaw Market to Generate $456.2 Million Revenue by 2030
- Published: January 2023
The Indian electric rickshaw market revenue is expected to be USD 456.2 million in 2030, recording a compound annual growth rate of 6.6% during 2022–2030. This can be imputable to their low-priced and convenient rides, increasing number of partnerships of OEMs with government authorities and public bodies, and reducing battery prices.
E-rickshaws are now one of the preferred modes of transport in the country due to their low maintenance and fuel cost, eco-friendliness, no noise pollution, ease of driving, and livelihood support. Further, price-conscious customers are finding e-rickshaws affordable to purchase and operate, as the rising fuel prices are starting to make a dreadful impact on earnings. With the burgeoning fuel prices, mounting operational costs, and promotion of full-electric vehicles by governments, these electric commercial automobiles have turned out to be a robust alternative over the past few years. This has led to a rise in their sales volume, which has been encouraging OEMs to launch newer models that offer higher energy efficiency, cargo capacity, and driving range.
The batteries that are used to power electric rickshaws—Li-ion and SLA—are witnessing a decline in their prices owing to technological advancements. Advanced Li-ion batteries also have a longer life and better performance, and their ramping production has helped bring down their prices, further resulting in economies of scale.
Moreover, the government is contemplating curbing the Goods and Services Tax (GST) on lithium-ion batteries, to increase the adoption of electric vehicles (EVs). The GST council last reduced the GST rate for these batteries from 28% to 18% in 2018, and the cost is expected to further decrease in the coming years. Owing to this, Li-ion-battery-powered e-rickshaws are likely to rapidly penetrate the market, as any reduction in the price of the batteries would result in a reduction in the cost of these vehicles.
In the past, e-rickshaws cost higher than gasoline-based rickshaws. However, the battery technology has evolved rapidly in recent years, bringing the price of e-rickshaws at par with that of gasoline-based rickshaws, thereby driving the demand for the former.
Passenger Carrier Category To Lead Market
Of the vehicle types, the passenger carrier category recorded the larger share in 2022, and it is projected to record the higher CAGR, of 7.8%, during the forecast period. This is due to the rising end-user affordability due to their cost advantages over conventional three-wheelers, elevating investments by producers in the design and development of highly efficient and affordable e-rickshaws, as well as the fact that they offer higher daily incomes than cycle-rickshaws.
E-rickshaws with a battery capacity of less than 101 Ah accounted for the larger share, of 68%, in the market in 2022. The category is also expected to continue holding the larger share in the coming years, owing to the preference for low-cost vehicles. Moreover, unorganized local players dominate the market, and most of them manufacture low-cost e-rickshaws.
Geographically, Uttar Pradesh led the Indian electric rickshaw market in 2022, and it is expected to retain its position in the coming years. The favorable government support, including the provision of subsidies on the purchase of these rickshaws, to enhance their adoption and dwindle the carbon emissions, is one of the most-prominent factors that support the sales expansion.
Further, the state has the highest number of EV charging stations. Last-mile service providers who earlier carried passengers on a cycle-rickshaw have started switching to these vehicles, and manufacturers are focusing on launching e-rickshaws that outperform regular rickshaws in terms of speed, which, in turn, is likely to boost the sales in the long run. Moreover, SMV Green Solutions Private Limited is focusing on achieving the state government’s objective of the 100% electrification of rickshaws in certain cities, including Varanasi, by 2030.
Key players in the market include Electrotherm (India) Ltd., Terra Motors Corporation, Hero Electric Vehicles Pvt. Ltd., Kinetic Green Energy & Power Solutions Ltd., Lohia Auto Industries, ATUL Auto Ltd., and Saera Electric Auto Pvt. Ltd.