Micro EVs Will be a US$90 Billion Opportunity by 2045

Micro EVs currently make up the majority of global electric vehicle sales. They are among the most electrified vehicle segments globally, with over 1 in 4 sales of two-wheelers, three-wheelers, and microcars in 2023 being EVs. Despite this, IDTechEx's new report "Micro EVs 2025-2045: Electric Two-Wheelers, Three-Wheelers, and Microcars" predicts significant growth of the global market is still to come. IDTechEx forecasts micro EVs will grow into a US$90 billion market opportunity by 2045.

 

 

 

Micro EVs are electrified versions of small vehicles. While there is no formal definition of micro EVs, IDTechEx includes electric two-wheelers (E2Ws) like scooters and motorcycles, electric three-wheelers (E3Ws), and microcars in this category. Micro EVs can seamlessly navigate dense urban areas, are less affected by traffic congestion, and have smaller parking requirements. They are most often used for travelling over short distances within cities at low speeds.

 

The global success of micro EVs is in large part due to their huge popularity in Asian markets (e.g. China, India, Southeast Asia). Asian economies have long held combustion two- and three-wheelers as affordable means of everyday transport, but micro EVs are now taking over their place and benefitting the region's established mobility culture.

 

With cities around the world still growing, traffic congestion worsening, and fuel prices increasingly volatile, IDTechEx's report "Micro EVs 2025-2045: Electric Two-Wheelers, Three-Wheelers, and Microcars", finds that micro EV sales are also picking up steam outside of Asia, with the European and North American markets also primed for growth.

 

 

In the same way that cars have seen rapid electrification in recent years, micro EVs have seen a prodigious uptick in adoption too. The utilization of micro EVs as low-cost city-based transport solutions for passengers and cargo make them ideal targets for electrification. They are predominantly used for short trips at low speeds, requiring less battery and drivetrains than other vehicle types. IDTechEx's report finds that batteries in micro EVs rarely exceed 20 kWh, with only some of the largest microcar models doing so. Most E2Ws and E3Ws even have batteries of 4 kWh or less - 15 to 20 times smaller than an average electric city car's battery but facilitating travel in urban areas just as well!

 

 

Governments are also getting more involved in encouraging the uptake of micro EVs. The most common way this is done is through purchase grants, which help reduce or eliminate the difference in upfront costs between a combustion and electric vehicle. Purchase grants are an especially important implement for a micro EV market which tends to be highly price-sensitive. For example, low-cost E2Ws in Asia can be as little as US$500-1,000 each, so even a small price premium of a few hundred dollars over its combustion equivalent would significantly dent sales.

 

Virtually all major governments worldwide now have some type of micro EV grant scheme (most often for E2Ws), though these vary in quantity and effectiveness. India stands out as a market where grant schemes have had greatly shaped the domestic micro EV landscape. The government's FAME II and EMPS schemes from 2019 to 2024 made E2Ws and E3Ws cheaper than their combustion alternatives, initiating a rapid growth phase that has seen India become one of the key market leaders for micro EVs.

 

The "Micro EVs 2025-2045: Electric Two-Wheelers, Three-Wheelers, and Microcars" report also brings to light other government measures to proliferate micro EVs. These measures are less ubiquitous than purchase grants but are more targeted to tackle the specific challenges faced in individual markets. For example, the Indian government has made incentives available to help establish local production of Li-ion cells, aiming to reduce its reliance on imports and drive down micro EV prices. Meanwhile, the Indonesian government is pushing for greater standardization to tie together its fragmented E2W market, and China is looking to roll out more charging infrastructure for its large E2W and E3W population in rural areas.

 

Their growing commercial applications are the final major driver for micro EV market growth. Micro EVs are developing into an important link in the road transportation of goods, and their use will be a major step towards decarbonizing the cargo industry. In particular, micro EVs are well-suited for last-mile logistics, where vehicles are generally lighter-duty and have lower capacity requirements but need to cover urban routes while parking frequently in a stop-start operational cycle.

 

OEMs increasingly produce E2Ws, E3Ws, and microcars with commercial applications in mind. These often have bigger batteries and more powerful motors than passenger models to better accommodate cargo haulage. With the global road freight industry set to more than double before 2050, IDTechEx's report expects commercial micro EVs will play a big part in the industry's overall growth.

 

 

To find out more about this IDTechEx report, including downloadable sample pages, please visit www.IDTechEx.com/MicroEV.

 

For the full portfolio of electric vehicles market research available from IDTechEx, please see www.IDTechEx.com/Research/EV.

IDTechEx provides trusted independent research on emerging technologies and their markets. Since 1999, we have been helping our clients to understand new technologies, their supply chains, market requirements, opportunities and forecasts. For more information, contact research@IDTechEx.com or visit www.IDTechEx.com.