MUMBAI, Aug 3: Small commercial vehicle maker Piaggio Vehicles is expecting L5 electric three-wheeler segment penetration in the domestic market reaching 50 per cent at the most by mid-2028, owing to a structural shift and other factors, a top company official has said.
The company, which last month rolled out two new electric passenger three-wheelers — the all-new Ape E-City Ultra and upgraded Ape FX Maxx- also said there is a need for the government to provide clarity on the issue of continuation of the incentives.
Piaggio Commercial Vehicles Pvt Ltd (PVPL) is the Indian subsidiary of Italian auto major Piaggio Group.
“There is a spike in the penetration of L5 category electric three wheelers in the country in the last one-and-a-half years. And this is when the government incentives under the FAME program have reduced to one-fourth in the same period,” Diego Graffy, Chairman and Managing Director of PVPL, told PTI in an interaction.
He said that if the level of penetration continues at this pace, “we expect this to reach 50 per cent by the end of 2027 or the beginning of mid-2028 even if the incentives are withdrawn, as there is a structural shift taking place in the market.”
There are two categories– L5 and L3– in the electric three-wheeler segment. L5 Category refers to three-wheeler auto-rickshaws for carrying passengers or cargo while e-carts fall in L3 category.
Both the Central Government and state governments are promoting the faster adoption of EVs through various fiscal incentives to the EV buyers.
The second phase of the government’s flagship scheme, Faster Adoption and Manufacturing of Electric Vehicles (FAME), launched in 2019 with an initial outlay of Rs 10,000 crore, later increased to Rs 11,500 crore, ended in March last year.
Subsequently, a new PM E-Drive Scheme with an outlay of Rs 10,900 crore for two years to boost EV sales, replacing FAME programme was announced in September 2024.
“The Government reducing the subsidy to one-fourth in the last one-and-a-half years could have definitely been a big disruption (in terms of demand) but instead of depressing the market, it has only kept on increasing. It means that the change or the shift that is happening now is structural and not anymore incidental. And this shift is happening for multiple reasons,” Graffy said.
Apart from the structural shift, the factors for the higher penetration include improved charging infra, lower cost of acquisition and ease of financing and servicing.
“These challenges have largely been addressed in this period leading to increased penetration, particularly of the passenger segment,” he said.
According to industry statistics, L5 passenger electric three-wheeler penetration accounted for 22.8 per cent in the total EV sales in FY 25 while the goods e-three-wheeler penetartion stood at 21.5 per cent in the same period.
Also, in the April-June quarter of this fiscal, as much as 32.4 per cent of the total ev penetration was recorded in the passenger e-three wheeler segment and 22.8 per cent in the cargo e-three-wheeler segment.
Graffy said that the adoption rate across Southern and Western parts of the country however, is still much lower, adding that, it is expected to increase in the next couple of years and when it happens, the overall penetration rate would go much higher than 50 per cent.”
He said that the e-commerce transition was leading to the demand for cargo e-three-wheelers, which is on the wane now while the passenger segment is picking up very rapidly due to the reason cited earlier.
Due to a structural transition that we see, now the passenger segment will have a much higher rate of adoption in the next few months, he stated.
He said that Piaggio Vehicles is “maintaining” more or less the pace at which the industry is growing, adding that the company keeps on renewing its product portfolio every two years since 2019 when it first introduced its e-three-wheeler in the country.
“We are not doing (renewing products) so frequently unlike many other players are doing in the space. We prefer to take our time. So, we are reviving our products every two years trying to introduce new features with innovation and technology,” he said.
“We believe EVs are an opportunity to reshape urban transport and improve livelihoods. New Apé E-City Ultra and Apé E-City FX Maxx are being built with these realities in mind. They deliver what the Indian customer needs: best in class range, low battery degradation, strong performance, and minimal operating costs,” Graffy said on the launch of the two models, which are priced at Rs 3.80-lakh and Rs 3.30 lakh, respectively.
“These vehicles are enablers of economic mobility, future-ready solutions that can scale across cities and small towns alike. Our focus is not only on innovation but also on contributing to a more inclusive and sustainable future,” he said.
On the incentives, he said,” uncertainty on (the continuation) of the incentives is definitely very disturbing and some clarity going forward is required.” “Even if the government wants the incentives to discontinue from a particular date, declare it clearly so that every OEM can plan the strategy accordingly,” Graffy said. (PTI)
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