India, the People’s Republic of China (hereafter "China") and Association of Southeast Asian Nations (ASEAN) countries are the biggest two- and three-wheeler (2/3W)1 markets worldwide. In 2023, sales of 2/3Ws in these markets, including both electric and ICE powertrains, reached 19 million, 17 million and 14 million units, respectively. Indonesia, Viet Nam, the Philippines and Thailand are the biggest markets among ASEAN countries, with sales of 2/3Ws far outnumbering sales of LDVs, highlighting their importance in the region. Likewise, the number of 2/3Ws in India is 157 per 1 000 people, compared with only 35 passenger cars.

Despite having smaller 2/3W markets overall, 2/3Ws also play a critical role in Latin America and Africa for daily passenger and commercial transportation. Electrifying 2/3Ws is therefore a promising lever for decarbonising mobility and improving urban air quality in these regions.

In 2023, the sales share of electric 2/3Ws was just 13% globally, while in terms of stock shares, 2/3Ws represent the most electrified road transport segment, with about 8% of 2/3Ws being electric. China sold the most electric 2/3Ws in 2023, with over 30% of the 2/3W sales being electric (decreasing from about 50% in 2022), followed by India (8%) and ASEAN countries (3%).

The global market for electric two-wheelers (2Ws) shrank 18% in 2023, continuing the downward trend of 2022, which was almost entirely due to supply chain challenges stemming from China’s pandemic-related restrictions. The decline at the global level was largely driven by a 25% drop in China, which continues to command the vast majority of global electric 2W sales. The Chinese electric 2W market downturn could be explained by the continuing supply chain disruptions related to 2022 zero-Covid policies.

The fall in global electric 2W sales masks steady growth in the expanding Indian market and in some ASEAN countries. However, they are still dwarfed by China, which accounted for 78% of global sales, with nearly 6 million electric 2Ws sold in 2023, compared to 880 000 in India and 380 000 in ASEAN countries.

In India – the second largest electric 2W market globally – 2023 sales grew by 40% compared to 2022. The Indian electric 2W market is dominated by the five largest domestic manufacturers (Ola Electric, TVS Motor, Ather, Bajaj and Ampere), which accounted for more than 75% of sales. The rapid growth seen in India is the result of strong policy support for EV deployment, such as the FAME II measure, which was first introduced in 2019 as a three-year purchase incentive policy. FAME II came to an end on 31 March 2024, and will initially be replaced by a new four-month subsidy extension scheme called the Electric Mobility Promotion Scheme (EMPS), announced in March 2024, which outlays over INR 4.9 billion (Indian rupees) (almost USD 60 million) to subsidise electric 2/3W purchases. The EMPS aims to support the roll-out of 372 000 additional electric 2/3Ws equipped with Li-ion batteries, bridging the gap between the FAME II scheme and potential future EV subsidies.

Other policies such as the supply-side incentives under the PLI scheme, Goods and Service Tax (GST) and Regional Transport Office (RTO) tax rebates, along with India’s Go Electric campaign, have all helped bolster electric 2W uptake. As an illustration of the effect of the latest subsidy schemes, in 2023, the sales-weighted average price of an electric 2W – after subsidies and tax rebates – was over 15% lower than its ICE equivalent, despite the upfront purchase price remaining around 30% higher on average. The savings potential of an electric 2W proves even more compelling from a TCO perspective. An electric 2W purchased in 2024 (assuming sales-weighted average prices from 2023) after 5 years of ownership would be more than 40% cheaper than its ICE equivalent over the same period, despite the EMPS scheme offering reduced subsidies compared to FAME II.

Although sales decreased to 250 000 units in 2023, Viet Nam remains the most dynamic electric 2W market amongst ASEAN countries, with a 9% share of 2W sales. ASEAN countries have the specificity of having higher share of scooters relative to other types of 2W, along with a high share of models equipped with lead-acid batteries, which accounted for 68% of electric 2W sales in 2020. The Vietnamese electric 2W market is dominated by a handful of home-grown manufacturers (such as VinFast, Pega and Dibao), whose overall manufacturing production capacity exceeds the local domestic sales, thus giving them the capacity to export to other ASEAN country markets. Elsewhere, Indonesia is aiming to increase its domestic electric motorbike manufacturing, allocating USD 455 million in subsidies to reach 800 000 new electric motorcycle sales, along with the conversion of 200 000 conventional motorcycles.

China, India, and all ASEAN countries remain far ahead of all other regions in terms of electric 2/3W sales, where other regions combined account for less than 5% of global sales. Türkiye ranks as the first market outside of Asia, followed by France, the Netherlands, Italy and Spain.

Globally, the three-wheeler (3W) market grew 13% in 2023, to reach 4.5 million sales, 21% of which were electric, compared to 18% in 2022. Almost 1 million electric 3Ws were sold in 2023, reflecting 30% growth compared to 2022. The market is highly concentrated, with China and India together accounting for more than 95% of all electric and 80% of conventional 3W sales. India overtook China in 2023 to become the biggest market for electric 3Ws, with over 580 000 sales. India saw its sales increase by 65% with respect to 2022, thanks to government financial incentives and resulting reductions in the cost of ownership of electric 3Ws. Sales in China declined 8% in 2023, to 320 000, making the country the second-largest electric 3W market.

The Chinese market continues to have a high share of lead-acid batteries in sales, despite government efforts to ban this technology in low-speed EVs and encourage a transition towards Li-ion technology, motivated by environmental concerns associated with the afterlife of lead-acid batteries when not recycled properly. Due to their low upfront purchase price, lead-acid battery powered electric 3Ws remain a widespread transport technology across India and rural China. In India, estimates of their market share range from 55% to 98%. However, Li-ion batteries are expected to continue gaining ground in the Indian 3W market following the introduction of the 2024 EMPS subsidy scheme, which specifically aims to reduce the purchase price of models equipped with advanced battery chemistries.

In 2023 in India, despite the upfront price being 55% higher than for its gasoline equivalent, the average electric 3W model (auto-rickshaw) is more than 50% cheaper to own after 8 years of service, and even without subsidies is over 40% cheaper. Even when considering the most cost-effective ICE 3W running on natural gas, the electric model achieves TCO parity as soon as 2 years after purchase, and works out about 40% cheaper over an 8-year lifetime. However, subsidies still play an important role, as without them, the TCO breakeven point is only reached after 4 years.

The market for electric light commercial vehicles (LCVs) continued to increase in 2023. Global electric LCV sales grew by more than 50%, and the sales share grew to just under 5%.

Two of the biggest electric LCV markets, China and Europe, saw a large increase in sales in 2023, as part of a broader trend of increasing LCV sales – both electric and ICE. In China, electric LCV sales exceeded 240 000, and in Europe, the electric LCV market leapt by 60% to reach almost 150 000.

As the electric LCV market matures, several OEMs have announced new electric models and new partnerships. Some of these new models are designed specifically for niche commercial activities, such as the B-ON Pelkan electric delivery van. In a partnership with Uber, Kia announced a modular van design with a body that can be swapped from shuttling to last mile-delivery depending on activity.

The average range of new LCVs increased by 55% between 2015 and 2023. For example, the two most popular electric LCV models in 2015 (Nissan e-NV200 and the Renault Kangoo BEV) had a range of around 170 km. This compares to a much longer range – between 210 and 260 km – demonstrated by two very popular models (Hyundai Porter and Ford E-Transit) in 2023. Despite this increase, companies expanding their electric fleets have called for improvements in the accuracy of range labelling.

Korea is the only country in which the penetration of electric LCVs is moving faster than electric passenger cars. In Korea, the Hyundai Porter and the Kia Bongo are the only electric LCV models sold. Both are produced by local manufacturers, and seem particularly suited for the Korean light freight market, which is characterised by shorter distances. These models are also favourably priced compared to ICE equivalents: The Kia Bongo 3 EV, for example, sells for around USD 25 000, including a subsidy of USD 7 700.