Anyone who has lived in Delhi, Dhaka, Nairobi, or Bangkok would know that there’s always something moving in the city, and more often than not, it is a three-wheeler.
But for decades, these three-wheelers were driven using petrol, diesel, or CNG. Times are certainly changing fast, as per Dataintelo’s market report, the electric tuk tuk market size is estimated at USD 2.4 billion in 2025 and further predicted to increase to USD 4.8 billion by 2034.
A CAGR of 8% might sound insignificant compared with the two-digit rates that some reports on electric vehicles tend to cite. However, there is more to this number than meets the eye.
The electric vehicle market is going through an important change in terms of its drivers.
Where the Market Is Right Now
According to Global EV Outlook 2026 by the International Energy Agency, over 1.2 million electric three-wheelers were sold globally in 2025, accounting for more than 25% of total three-wheeler sales.
In spite of the dramatic contraction of the market of three-wheelers, electric vehicles did not fall in popularity in 2025, which speaks for the future of buyers.
India takes the leading position. More than 800,000 electric three-wheelers were sold in India in 2025, and almost two-thirds of the global number of electric three-wheelers was sold there, while 85% of the market revenue is generated in Asia Pacific.
Data from Vahan registration by Autocar Professional indicate that in FY2026 there were 830,819 electric three-wheelers in India, taking 61% of the Indian market of three-wheelers. CNG made up only 24%.
Together China, India and Türkiye make 95% of the global sales of electric three-wheelers. The surprise here is Türkiye, as it took 95% out of 115,000 electric three-wheelers sold in Europe in 2025.
The subsidy issue
The key new development here has been the Indian PM E-DRIVE program. The L5 sub-class, for the bigger, faster e-autos, reached its 288,000 target and shut down in December 2025.
In March 2026, the government extended the electric three-wheelers subsidy to March 2028, but at half its previous level: Rs 2,500/kWh, up to Rs 12,500 per unit. Subsidies are available only for those with advanced batteries, not lead-acid.
Registrations rose by just 3.3%, to 64,549, in April 2026. This clearly shows a market maturing from one driven by subsidies to one of replacement and upgrade.
As electricity has now taken over from CNG in India, any further growth will depend more on convincing current electric users to upgrade than to convert CNG drivers.
Growth factors worth watching
Premiumisation in the segment
According to EVreporter, the penetration rate of electric vehicles among L5 passenger three-wheelers increased from 20.8% in 2024 to 31.8% in 2025.
In addition, sales of L5 passenger cars grew 76% in FY2025-26. On the other hand, sales of e-rickshaws have stagnated at about 475,000 per annum. L5 e-autos cost more than twice as much as e-rickshaws, so the change in focus on L5s increases market revenue even at a low number of units sold.
Range anxiety is dissipating
As mentioned above, in February 2026, Bajaj introduced WEGO P9018 equipped with a battery pack of 17.7 kWh and with a certified range of 296 km.
Mahindra Last Mile Mobility's UDO provides about 200 km of range. With no need to recharge, taxi drivers do not need to organize their day around charging.
The lithium-ion batteries gain prominence
At the same time, according to the forecast, the share of lithium-ion will be around 61% in 2025 and will continue to increase at the rate of 10.5%. Lead-acid batteries dominate the cheapest segment of e-rickshaws where initial cost takes priority.
However, owners usually change their lead-acid batteries with lithium batteries when they replace their vehicles.
It seems finance is getting into the act
The majority of tuk tuks being operated are individually owned and not in fleets, so financing will be as important as the quality of vehicles themselves.
For instance, Kinetic Green worked with IIFL Samasta Finance in 2025 on a financing deal for consumers, while Terra Motors has zero down payment plans through its financial services company.
Cargo is the hidden gem
Passengers have the major share of the market – 81%. But the cargo electric tuk tuks are expected to experience the most growth of 10% per year. EVreporter noted that the electrification of the L5 goods three wheelers fell to 21.6% in 2025, so there is a lot of fuelled fleet left to be converted.
Competitive environment: traditional brands gain momentum
The Indian market is shifting away from rickshaw producers towards traditional companies. Mahindra Last Mile Mobility accounted for 101,905 units in FY2026, increasing 46% on the year and being valued at Rs 10,822 crore through financing in July 2026 ahead of an IPO in 2027.
Bajaj Auto recorded 89,604 units, rising 76%. TVS ramped up the King EV Max from below 1,700 units to almost 28,000 in a year.
The new entrants face challenges. YC Electric, Saera Electric Auto and Dilli Electric Auto all had their FY2026 volumes decline by 11% to 19%. Euler Motors raised Rs 437.5 crore in March 2026, while Montra Electric had its EV revenue grow 160%.
Case studies: three markets, three paths
Bangladesh:
formalizing an enormous informal fleet. There are over 60 lakhs of battery-powered rickshaws in Bangladesh, with 10 to 12 lakh rickshaws in Dhaka itself.
In August 2026, the government decided to establish a unified licensing authority through urban and rural local bodies. Licensing usually favours type-approved vehicles, thus giving a way forward for branded vehicle manufacturers.
Kenya:
Small but symbolic. In May 2025, the company Sunny Tuk-Tuk Ltd introduced its first 25 units of electric three-wheeler taxis locally manufactured in Diani with support from atmosfair.
While the figures may be small, the Middle East and Africa region is predicted to have the highest growth rate of 14%.
Bangkok:
Tuk-Tuk Fleet Financing. The Asian Development Bank has partnered with BANPU to finance the purchase of 1,500 electric six-seater tuk-tuks and their charging depots at THB 2.4 billion.
This is an innovative way of financing that could be copied by other cities around the world.
Potential risks that the decision-makers need to consider
The potential withdrawal of subsidy can be considered one of the most evident short-term risks. E-rickshaw subsidy through PM E-DRIVE has been slashed from Rs 19.2 billion to Rs 500 million.
Also, the currency risk needs to be considered, since rupee appreciated and became equal to 88.35 per US dollar in FY2025-26 from 84.53 during the previous year.
Rules of access also need to be considered as a risk factor since the ban on using e-trikes in main Metro Manila roads including EDSA and C-5 started to take effect from January 2026.
China is dragging down the global market, since sales of electric three-wheelers decreased by 5% in 2025 and amounted to less than 290,000 units.
What this implies for the future
The advice for manufacturers would be that they have to differentiate themselves through range, batteries, and finance, and not just pricing.
Investors, on the other hand, might find better value in investments in cargo vehicles, lithium-ion value chain, and foreign markets, not in the overcrowded Indian e-rickshaw segment.
City authorities can license and regulate this growth such that the streets become more livable.
The 8% CAGR for a period of nine years is not a phenomenal figure, but it represents an industry which is moving past novelty and competing on economics. And this is when a market starts maturing.
Author Bio
Ashish Kolte is a Marketing Manager at Dataintelo with expertise in marketing, market intelligence, and business strategy.
He combines marketing insights with industry research to analyze market trends, identify growth opportunities, and provide data-driven perspectives on emerging industries and global business developments.
