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Domestic credit rating agency ICRA in its latest report has said that electric three-wheelers, including e-rickshaws are expected to gain traction going forward due to favourable operating economics and the government's focus on cleaner means of transportation, particularly for commercial applications. It said the electric segment is likely to account for 14-16% of new three-wheeler sales (excluding rickshaws) by FY2025, up from 8% currently. It also said penetration is estimated to rise to 35-40% by FY2030 as the product gains more acceptance, and financing-related challenges subside.

According to the report, until now, the unorganised e-rickshaw industry has dominated the expansion of the e3W market, accounting for 90% of all e3Ws sold in the country. This segment has thrived over the last five-seven years due to lower upfront expenses and operational savings, as well as minimal compliance requirements. However, e-autos, which have a larger load-bearing capacity and top speed than e-rickshaws, are also gaining popularity, with sales split evenly between the goods and passenger carrier segments. The latter has been fuelled in large part by favourable operating economics and a desire by numerous companies, notably e-commerce firms, to employ green vehicles for last-mile transportation needs.

On the other hand, it said the eauto passenger carrier segment has had relatively lower levels of EV adoption, although this trend is improving. Because e-rickshaws are also an option for passenger transportation, with lower upfront costs, more seating capacity, and fewer compliance requirements, the adoption of e-auto passenger carriers has been relatively slower.