Global emergence of electrified small-format mobility
Electric two- and three-wheel vehicles are gaining in popularity. What does the future hold for the market?
By Patrick Hertzke, Jitesh Khanna, Bhavesh Mittal, and Felix Richter – Inventors patented the first electric bikes back in the 1890s, but their innovations never garnered the same attention as other early-transportation milestones, including the first subways and the Model T Ford. Today, however, several trends have converged to bring e-bikes out of obscurity. Sales of electric vehicles (EVs) are increasing as governments crack down on emissions. Meanwhile, innovators have introduced new technologies and business models that are breathing life into the market for small-format EVs (those with two or three wheels). Improbable as it may seem, e-bikes could finally be having their day.
To gain more insight into the burgeoning market, we examined worldwide trends for small-format EVs, looking at both geographic growth patterns and the forces shaping the industry. Our analysis shed some light on strategies that can help OEMs and other players succeed as small-format EVs gain traction.
The sales figures for small-format EVs may initially seem modest. The market for two-wheel EVs (E2Ws) and three-wheel EVs (E3Ws) was valued at around $97 billion, or 4 percent of global auto sales. The sector has momentum, however, and global sales of E2Ws and E3Ws are increasing by more than 14 percent annually. (That figure excludes sales in China, which was an early adopter of small-format EVs and is thus experiencing slower growth.) By 2022, global sales of E2Ws and E3Ws could reach $150 billion.
It’s impossible to generalize about global sales trends, since transportation patterns and preferences vary widely by location, but some country-specific developments are striking. Take China: the country now accounts for around 30 percent of the global market for small-format EVs. What’s more, more than 80 percent of 2Ws in China are electrified, making it the dominant market by far in that category. The story may soon change, however, since growth of E2Ws is plateauing in China and surging in the European Union, Latin America, the Middle East and North Africa, and Southeast Asia.
India sells the largest number of E3Ws by far, and they now account for about half of all rickshaws in the country. By 2026, around 80 percent of 3Ws in India will be electric. One caveat: if more light commercial vehicles become electrified, they could become the default option for cargo transport, provided that their performance and economics improve.
Globally, we expect electrification to accelerate most quickly in the scooter and light-motorcycle segments. Electrification of heavy motorcycles will follow, but it won’t reach the levels seen with smaller vehicles. more>
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