New York, NY -- (SBWIRE) -- 05/03/2019 -- Environmental degradation, government support, low ownership cost, and declining battery prices are resulting in increased electric three-wheeler sales across Asia-Pacific (APAC). Electric three-wheelers are those, in which the fuel is replaced by an electric battery as its power source. Projected to witness a CAGR of 4.1% during the forecast period 2018–2023 as per P&S Intelligence, the Asia-Pacific (APAC) electric three-wheeler market is expected to generate a revenue of $11,935.1 million by 2023.

Going by the vehicle segment, the domain is categorized into passenger carrier and load carrier. Of the two, passenger carriers registered higher sales, owing to a wide consumer base in the region and demand for low-cost shared mobility. As per the motive power, <1,000 W, 1,000–1,500 W, and >1,500 W are the three categorizations of the electric three-wheeler market in Asia-Pacific. Among these, the 1,000–1,500 W category recorded the highest sales volume (over 50%) in 2017, owing to its cost-effectiveness.

Coming to the market growth factors, rising air pollution and government impetus toward curbing it are on the top of the list. In many countries in the region, governments offer people incentives and subsidies to encourage the adoption of electric vehicles, while manufacturers get land at reduced rates to set up production facilities. Further, stringent norms related to vehicular emissions and public campaigns focusing on reducing these are further compelling people to adopt electric vehicles.

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The second important factor driving the Asia-Pacific electric three-wheeler market is cost-effectiveness. Battery-powered three-wheelers run on electricity, which is a lot cheaper than gasoline and natural gas, making them more cost-effective than their fuel-based counterparts. Further, electric three-wheelers have fewer moving parts, hence, the risk of malfunctioning due to breakage is significantly less, which means less maintenance cost. In addition, the prices of lithium-ion (li-ion) batteries have come down considerably in the last few years, bringing down the cost of electric three-wheelers even more.

The cost-effectiveness of li-ion batteries, coupled with its light weight, is expected to boost its penetration into the electric three-wheelers industry in the coming years. Another reason these are predicted to eventually replace sealed lead-acid (SLA) batteries is that the latter can be harmful to humans, if not disposed off properly. In China, the government shut down more than 80% of its SLA battery-manufacturing plants by 2011, further paving the way for li-ion variants to dominate the electric three-wheeler market in Asia-Pacific.

Talking of the regional scenario, China dominated the market during the historical period 2013–2017 in terms of sales volume as well as revenue generation. Reasons for this were the early introduction of such vehicles, abundance of manufacturers and suppliers, and favorable government policies. While China will still be the Asia-Pacific electric three-wheeler market leader during the forecast period, India will witness the highest sales and revenue CAGRs, owing to rising pollution levels and government support.

Therefore, it is clear that as environmental degradation impels governments across APAC to form stricter emission norms and encourage electric vehicle adoption, the market for electric three-wheelers will continue to progress.