OEMs up the ante on medium-speed electric three-wheelers

OSM's Rage EVs

While Tata Motors and Ashok Leyland are counting on electric variants of Ace and Dost Small Commercial Vehicles (SCVs), respectively, numerous Original Equipment Manufacturers (OEMs) like Bajaj Auto, Piaggio, Mahindra and Mahindra (M&M), Omega Seiki Mobility (OSM), Euler Motors, etc., are training their sights on medium -speed electric cargo or passenger vehicles.

In auto industry parlance, there are Level 5 (or simply L5) category of electric three wheelers, a segment above electric autorickshaws or electric carts (L3 category). To put it another way, it is a three wheeled motor vehicle with maximum speed exceeding 25kmph or motor power exceeding 0.25kW.  Its Gross Vehicle Weight (GVW) is limited to 1,500 KG (excluding the weight of traction batteries).

While close to 25,000 units of such category of E3Ws were retailed last year (as per Vahan Data), industry players are foreseeing 4X growth in 2023 due to wider availability of products across different price points, improved financing by banks for EVs and frugal running costs when compared to ICE 3-wheelers. ICE is short for Internal Combustion Engine.

As per Vahan Data, Mahindra Last Mile Mobility (EV arm of M&M) was the market leader in the L5 E3W category during FY 2022 at 3,295 units, followed by Piaggio at the second spot at 3,013 units and Omega Seiki in the third position at 815 units.  During the same period, Kinetic Green Energy came in 4th at 326 units, followed by Euler Motors in the 5th position at 305 units and Altigreen Propulsion Labs in the 6th position at 161 units.

On an overall basis, the Total Industry Volumes (TIVs) of E3Ws stood at 275,000 units, which included 25,000 units for cargo applications and 250,000 units for passenger applications. However, these numbers also include vehicles sold on lease, rent or subscription.

OEMs at breakneck speed with rollouts, capex 

Bajaj Auto, which is the largest three-wheeler manufacturer in the country, has confirmed that it is on course to rolling out an electric variant in the near term

“We are readying the dealerships and are training the manpower. Hopefully, we soon we will be dispatching the three-wheelers. We have very good brands and have a very good understanding of the requirements of the customer. And hopefully, will win the trust of the customer and on the basis of the superior product which we deliver,” Rakesh Sharma, Executive Director of Bajaj Auto, told Moneycontrol.

Mahindra and Mahindra (M&M) recently announced that it will be making an investment of Rs 1,000 crore over a period of eight years in expanding its facility at Zaheerabad, Telangana. The new production line has been earmarked for making electric three-wheelers for passenger travel and cargo, and cargo four-wheelers. At present, its three-wheelers (ICE and EV) are made in Bangalore, Zaheerabad and Haridwar.

“We have aggressive growth plans in this segment as electric three-wheelers and four-wheelers (cargo) are growing at a much faster rate than the electric passenger vehicle segment,” Rajesh Jejurikar, executive director, auto and farm sector, M&M, said at the Q3 FY23 results announcement. M&M started its electric 3-wheeler journey with the e-Alfa Mini in 2017, followed by the successful launch of the Electric Treo, Treo Yaari, Treo Zor, and e-Alfa Cargo.

Piaggio, Omega Seiki, Euler Motors  

Piaggio India has widened its offerings by launching Ape E-City FX Max in the passenger segment at Rs 3.25 lakh, and Ape E-Xtra FX Max in the cargo segment starting at Rs 3.43 lakh (both ex-showroom Pune).  While a fixed battery solution is available for both new models, a swappable battery solution for the new FX Max will also be available soon.  Piaggio India did not want to participate in this story.

EV maker Omega Seiki Mobility (OSM), which launched Stream for rural markets last year, is also on course to rolling out Stream City for intra and inter-city applications. To be priced in the range of Rs. 2.5-4.5 lakh, the top-end variant will have a range of 400 km per charge.

“In 2022 (calendar year), we enjoyed 20 percent market share in the electric cargo vehicle space (L-5 Category). In 2023, we are expecting the L5 three-wheeler market (ICE+EV) to grow to 350,000 units out of which 50,000 will be cargo and 300,000 should be the passenger version. We are expecting to gain OSM’s overall marketshare to 25 percent for electric cargo and 3-5 percent for passenger versions. We will also be aggressively getting into electric passenger vehicle this year,” Uday Narang, Chairman of OSM, told Moneycontrol.

Faridabad-based Euler Motors, which had introduced its cargo three-wheeler, HiLoad EV in October 2021, has an orderbook of 10,000 units. The EV startup, which has delivered 2,500 units so far, is anticipating 7X growth in sales during this financial year.

“If you look at the entire pan-India penetration, the year 2025 will be the tipping point of the Electric (Light) Commercial vehicles industry where we will see roughly 40-50 percent contribution from electric variants,” said Saurav Kumar, founder and CEO of Euler Motors.

Rapid expansion 

According to credit rating agency ICRA, the electric three-wheeler market in India is growing at a rapid pace, with volumes of more than 310,000 units reported during the first 10 months of FY2023. However, a key proportion of this pertains to the unorganised e-rickshaw segment, whereas electric auto sales were less than 20,000 units during this period, as per ICRA.

ICRA maintains that the market is fast expanding, with robust growth visible from the e-3W sales of 180,000 units and e-auto sales of 10,000 units reported during full year FY2022. In fact, the domestic three-wheeler market has emerged as one of the fastest adopters of electric vehicles, surpassing the domestic 2W, Passenger Vehicle and bus segments, ICRA says.

“Apart from the lower running costs, other factors supporting the adoption of E3Ws include the favorable policy push (in terms of subsidy support, exemptions on registration fees, road taxes, permit requirements etc.), improvement in public charging infrastructure etc.,” said Sruthi Thomas, Assistant Vice President & Sector Head - Corporate Ratings, ICRA.
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