Government Support behind LSEV Revolution in APAC. But, Is This the Whole Story?

Posted by Pramod Arya on November 1st, 2022

With the increasing urbanization in the Asia-Pacific countries such as India and China, growing pollution levels, and the rising implementation of stringent environmental protection laws and policies, the deployment of low-speed electric vehicles (LSEVs) is increasing rapidly in the APAC region. Moreover, the governments of many APAC nations are providing huge support, in the form of various financial incentives such as grants, tax rebates, and subsidies for encouraging the usage of low-speed electric vehicles.

The governments of India and China are focusing on the complete electrification of public transport. For achieving this goal, they are providing heavy financial aid on the purchase of low-speed electric vehicles. For example, the Indian government is offering subsidies in the range of 0—0 under the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) scheme. Furthermore, the environmental protection organizations are raising public awareness about the pollution caused due to the usage of the conventional vehicles.

Besides the aforementioned factors, the soaring expenditure on crude oil imports in several APAC nations is also positively impacting the sales of LSEVs in the region. In these countries, a major portion of the total crude oil imports is used by the public transport fleets. The adoption of low-speed electric vehicles is helping the governments of these countries considerably reduce their expenditure on crude oil imports. Additionally, the LSEVs have lower operational costs than the traditionally used electric vehicles.

As a result, a lot of people in the APAC countries are preferring these vehicles over the regular electric vehicles these days. Furthermore, the public transport fleet owners and authorities, especially in the developing countries, are focusing more on the long-term cost and environmental benefits, which is further boosting the deployment of LSEVs in the APAC region. Because of these reasons, the Asia-Pacific (APAC) low-speed electric vehicle (LSEV) market is predicted to register huge growth in the coming years.

The market is predicted to progress at a CAGR of 6.6% between 2018 and 2025 and reach a size of 71.8 million units in 2025. Depending on product, the APAC LSEV market is divided into four-wheeler, three-wheeler, and two-wheeler. Out of these, the two-wheeler category registered the highest growth in the market in the years gone by. This category is also predicted to record the highest growth in the market in the future years.

This would be primarily because of the rising usage of two-wheelers for personal traveling in the region. China dominated the APAC LSEV market in the past, in terms of both volume and value, as per the findings of P&S Intelligence, a market research firm based in India. This was because of the presence of favorable government regulations and the rapid growth in the urban population of the country over the last several years.

Hence, it can be said without any doubt that the sales of low-speed electric vehicles would surge in APAC in the forthcoming years, primarily because of the rising implementation of favorable government policies regarding their usage and the growing popularity of eco-friendly modes of transportation in the region. 

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