Low Speed Electric Vehicle Market to Expand at a Healthy Growth Rate in the Coming Years

Due to the stirring conscience of people in the wake of the rapid deterioration of the air quality, the sale of electric vehicles (EV) is increasing around the world. Among the several types of EVs, those that have a lower speed, abbreviated as LSEVs, are gaining widespread popularity. These include two-wheelers, three-wheelers, and micro-cars, which are among the most affordable of all EVs, which is one of the key reasons behind their rising adoption, especially in emerging economies.

Thus, the low-speed electric vehicle market will grow from $35.2 billion in 2017 to $68.0 billion in 2025, at an 8.7% CAGR between 2018 and 2025. P&S Intelligence credits a multitude of factors for this growth, the most important being government initiatives. Around the world, governments have started implementing stringent policies to control emissions from internal combustion engine (ICE) vehicles and encourage the masses to shift to EVs. For instance, under the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India), the government is offering purchase subsidies in the range of $370 to $910 (INR 25,000 to INR 61,000) for three-wheelers.

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Among the three major types of LSEVs, two-wheelers have dominated the transportation landscape around the world. These vehicles are being rapidly integrated into public sharing and food and grocery delivery fleets. Further, with efforts being taken to set up charging stations, even individuals have started purchasing electric scooters and motorcycles. Similarly, the sale of electric three-wheelers, especially e-rickshaws, is burgeoning, particularly in Asia. E-rickshaws, especially the plug-in type, don’t even require a proper charging station; they can be simply plugged into a domestic electricity socket. This advantage, coupled with the vast unmet need for cost-effective first- and last-mile transportation services, is driving e-rickshaw adoption.

This is one of the reasons that Asia-Pacific (APAC) has been the largest low-speed electric vehicle market almost since this concept was born. Most of the regional population still cannot afford ICE cars, let alone electric cars, which is why two- and three-wheelers have been an important part of the everyday life here. Additionally, with governments taking initiatives to make EVs affordable, the sale of electric scooters and e-rickshaws have been quite high. Moreover, APAC is also the largest producer of LSEVs and their components, including the motor and battery, which further makes these automobiles cost-effective.

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Hence, with governments around the world offering purchase subsidies on LSEVs, their adoption will keep growing.