Indian E-Rickshaw Market to Expand to $1.39 Billion by 2025: Report

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India witnessed an exponential growth of electric rickshaws (e-rickshaw) since they first entered the Indian public transportation network. An E-rickshaw has always been an easy to go and cheaper option for the short-distance daily commute. Their cost effectiveness has also made e-rickshaw the preferred option for an ever larger section of society.

Now, according to a recent report titled, ‘India Electric Rickshaw Market’ by Prescient & Strategic Intelligence, the Indian e-rickshaw market is expected to grow exponentially and reach a market value of USD 1,394.2 million by 2025, advancing at a CAGR of 33.3 percent during the forecast period (2020–2025). In 2019, it was at USD 786.2 million.

That immense growth is the result of a growing acknowledgement of the advantages these e-rickshaws bring, in terms of cost of ownership and maintainance, which has led to increasing incentives by the government and moves by manufacturers for the design and development of more efficient and affordable rickshaws.

However, Covid-19 has impacted the unorganized and local players operating in the market severely. It is also estimated that 30 percent of these manufacturers/assemblers will permanently shut down their business post Covid-19. The sales figures are expected to reach the 2019 level in 2022, with the market gradually recovering thereafter, according to the report.

The report suggest that the changing dynamics between India and China have also been propelling the localization of e-rickshaw manufacturing in India itself. This may cause an increase of 8-10 percent in the price of passenger e-rickshaws in a short term. Consequently, the share of load carrier e-rickshaws is projected to increase significantly during the forecast period, on account of the need for the last-mile transportation of logistic goods, including fruits and vegetables.

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According to the report, passenger carriers dominated the Indian electric rickshaw market during 2014–2019 and are expected to continue covering a larger market share, in terms of both value and volume, in the future too. The market for this category is also driven by the rapidly increasing urban population in the country.

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Additionally, the report tells how Delhi was the largest market for e-rickshaws during 2014-2019. As the sales of e-rickshaws have picked up here since 2013, in response to the increasing levels of air pollution in the capital, the Delhi government has also announced a subsidy of INR 30,000 on the purchase of e-rickshaws. This, in turn, has led to the increase in their demand in the city, further benefitting the market.

During that period, rickshaws of 1,000–1,500 watt, motor power contributed the largest revenue to the Indian e-rickshaw market, accounting for more than 50 percent in 2019. This can be ascribed to the optimum benefit–cost ratio offered by these vehicles.

There was one more reason that elevated the e-rikshaw market, and that is the unorganized category, lack of a regulatory framework, the availability of low-cost electric rickshaws, and their less complex powertrain.

Interestingly, Uttar Pradesh is expected to be the largest e-rickshaw market in India during forecast period of 2020-2025, primarily due to the growing demand for these rickshaws in Tier-1 cities, Tier-2 cities, and the rural-urban periphery. Besides, other states such as Bihar, West Bengal, and Assam are witnessing a significant demand for these rickshaws.