Electric 3-Wheeler Expects To Have A Majority Share Of 40% Of Electric Penetration By FY30 In India

According to ICRA, 30-40% of India’s public transport system is expected to be electric-powered by the fiscal year 2030. In this, the electric 3-wheeler segment is predicted to be a major player.

Key Highlights

• As per ICRA, the increased electrification of the Indian auto sector may result in a capex of Rs 25,000-30,000 crore for the automotive component in FY26.
• While battery cells, which make up 35-40% of the cost of an EV, are still completely imported, only 30-40% of the EV supply chain is currently localised.
• In FY24, e-buses, e-LCVs, and electric 3-wheelers had respective electric penetration rates of 7%, 0%, and 9%.

The Government of India’s goal of switching from traditional fuels like petrol and diesel to sustainable alternatives to drive economic growth may be significantly supported by electric-powered public transportation. ICRA (Investment Information and Credit Rating Agency) predicts that by the financial year 2030, electric penetration in India’s public transport sector will reach 30-40%. Let’s explore the ICRA estimation of the country’s public transport sector.

Also Read: Electric 3-Wheeler Passenger Sales In January 2025: Mahindra And Bajaj Dominates The Market

ICRA’s Projections On Electrification Of Indian Auto Sector

ICRA predicted that the automotive component may incur a capital expenditure (capex) of Rs 25,000-30,000 crore in FY26 due to the growing electrification of the Indian automobile industry. Among other things, this capital expenditure will be used for technical innovation (including the development of electric vehicles), capacity expansion, and localisation and capability development.

According to ICRA’s findings, only 30-40% of the supply chain for electric vehicles (EVs) is currently localised, and while battery cells – which account for 35-40% of vehicle costs – are still entirely imported, components like traction motors, control units, and battery management systems have seen significant localisation in recent years.

ICRA Expects Crucial Role Of Electric 3-Wheelers

Broadly speaking, electric penetration is currently in the low single digits for the majority of vehicle segments. The penetration of e-buses, electric 3-wheelers (e3Ws), and e-LCVs (electric light commercial vehicles) was 7%, 9%, and 0%, respectively, in FY24. According to ICRA, e3Ws will account for 40% of all electric penetration by 2030, followed by e-buses at 30% share and e-LCVs at 12-16% share. Furthermore, it is expected that electric cars and e2Ws will increase by 15% and 25%, respectively.

ICRA Finds Export Potential In The Auto Sector

Vinutaa S, Vice President, ICRA Limited, stated, “Exports, which account for close to 30% of the industry's revenues, are likely to be impacted by subdued vehicle registration growth in target markets. However, factors like rising supplies to new platforms, driven by vendor diversification initiatives by global OEMs/ Tier-I, and higher value addition, partly stemming from increased outsourcing, bode well for Indian auto component suppliers.”

This will also boost export prospects for the auto components. The electrification trend in ancillaries is anticipated to be driven by parts for e2Ws and e-PVs (electric passenger vehicles). ICRA added that because of the closure of plants in the European Union due to viability concerns, India may expand its production of metal castings and forgings. The replacement segment’s exports would be boosted by the aftermarket, which includes used car sales and the ageing of vehicles on the worldwide market.

Initiatives For Electrified Public Transport System

To encourage the electrification of public transportation, the central government has launched a number of programs, such as the PM e-Bus Sewa, PM E-DRIVE, and others. According to the credit rating agency’s study, government subsidies, cheaper ownership costs, a variety of OEM portfolios, demand aggregation by government-backed companies, technological advancements, and reduced electric battery prices will all help to advance the electrified public transportation system.

Read More

Top 5 Mahindra Blazo Trucks In 2025: Which One Should You Choose?

Ecofuel Starts To Offer Sustainable Fuel Solutions For Heavy Vehicle Market