Mint Explainer: Why electric three-wheelers are booming while cars and scooters lag
Electric vehicles now make up the majority of three-wheeler sales in India, compared to just 4.1% for cars and 6.2% for two-wheelers. What explains the huge gap?
Of the 1.1 million three-wheelers sold in India this calender year (as of 24 November), more than 687,000 or about 60% were electric vehicles (EVs), compared with a measly 4.1% for cars and 6.2% for two-wheelers, government data showed. This is especially impressive considering India’s first electric three-wheeler—an e-rickshaw by Saera Electric Auto—was launched just 14 years ago, in 2011.
The wide gap is due to the fact that three-wheelers are, for a variety of reasons, far more amenable to the switch than two- and four-wheelers. Huge investments in electric three-wheelers have also led to near price parity with their fossil-fuel cousins, especially when factoring in their lower operating and maintenance costs.
Mint explains the various factors behind the rapid rise of electric three-wheelers, including their typical use cases and government incentives under the Faster Adoption and Manufacturing of Hybrid & Electric Vehicles in India (FAME) and PM E-Drive schemes for more than a decade.
What makes three-wheelers different?
An important factor that separates three-wheelers from two- and four-wheelers is what they are typically used for. Three-wheelers are primarily used for commercial freight transport, usually small cargo, in last-mile services. This means such vehicles run for longer each day than the typical two- or four-wheeler, so switching to electric can significantly reduce carbon emissions.
Also, because electric three-wheelers typically operate only during the day, they can be charged overnight with ease, reducing range anxiety (the fear that a vehicle may run out of power in the middle of a journey, with no charging facilities nearby).
How have electric three-wheeler sales progressed over the years?
The sale of electric three-wheelers in India began in 2011 with souped-up, battery-run e-rickshaws in the L3 category. These are low-powered e-rickshaws, typically used to ferry daily commuters over short distances in cities such as New Delhi and Kolkata. By 2016, more than 45,000 such battery-powered rickshaws had been sold in India.
Mahindra & Mahindra launched the e-Alfa series of electric three-wheelers in 2017 and the Treo series in 2018. These are larger and sturdier vehicles, with some models categorized as L5. The key difference between L3 and L5 models is battery capacity. L3 units generally have 2-7 kWh batteries while L5 units have 7-12 kWh batteries. For every two electric L5 units added to Indian roads in 2025, five electric L3 units were added, Vahan data showed.
While the 1.1 million sales figure for 2025 includes L3 vehicles, most electric rickshaws in this category don't qualify for government incentives as they have a considerable share of imported parts and don’t have the domestic value addition that the government mandates.
How did electric three-wheelers achieve near price parity with fossil-fuel models?
A crucial factor for buyers is the upfront cost of a vehicle. If an electric scooter costs twice as much as a similar petrol scooter, customers are unlikely to choose the electric model. But if the price difference is negligible or reasonable, customers are far more likely to buy the zero-emission model. EVs also typically have lower operating and maintenance costs than internal combustion engine (ICE) models as they have fewer moving parts.
While upfront costs matter, the total cost of ownership (TCO) is the all-important factor in determining whether buying an EV will be beneficial in the long run. TCO includes the upfront cost of purchasing the vehicle (capex), as well as the cost of running it (opex). Commercial use-cases have better opex because these vehicles run for fixed hours on fixed routes, making returns on investment clearer for buyers.
Electric three-wheelers have seen a high rate of adoption because of heavy investments from manufacturers early on, experts said, which has led to near price parity between ICE and EV models. A typical electric three-wheeler costs around ₹3-5 lakh, while comparable ICE vehicles cost about ₹1.5-3.5 lakh. Factoring in the lower operating and maintenance costs brings parity on the TCO.
Sharif Qamar, associate director, transport and urban governance at The Energy and Resources Institute (Teri), said, "Two major factors have worked very well for this segment. There are multiple models available to customers, and the price parity along with lower operational costs have contributed to the rapid adoption of electric three-wheelers."
What are the financial incentives for electric three-wheelers?
Two iterations of the FAME scheme ran for a decade from FY15 to FY24. Under this scheme, the government asked manufacturers to sell their EVs at a discount, for which they would be reimbursed later. Numerous state EV policies offered similar incentives.
The PM E-Drive scheme, which replaced the FAME schemes in October 2024, aims to incentivize the rollout of nearly 320,000 electric three-wheelers with an outlay of about ₹900 crore. It has already received claims to incentivize more than 250,000 such vehicles as of early November 2025, with the scheme slated to end in March 2026.
The government has also reduced the GST on EVs to 5% since 2019, offering a significant tax advantage over ICE vehicles, which are still taxed at 18% and above.
These incentives have borne fruit, with several companies rolling out electric three-wheelers rapidly. According to the government's Vahan vehicle registry, more than 500 companies currently manufacture electric three-wheelers in India.
Mahindra & Mahindra Ltd's subsidiary Mahindra Last Mile Mobility Ltd leads the charge, having sold more than 80,000 units so far in calendar year 2025, Vahan data showed. The company has three manufacturing plants—Bengaluru, Zaheerabad, and Haridwar. Other manufacturers include new entrant Euler Motors, veteran three-wheeler maker Piaggio, and Saera Electric Auto Pvt Ltd.
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