Small commercial vehicle manufacturer Piaggio Vehicles expects the L5 electric three-wheeler segment to reach a 50 per cent share of the domestic market by mid-2028, driven by a structural shift rather than just government incentives, according to its Chairman and Managing Director, Diego Graffy.

Speaking after the launch of two new electric passenger models — the Ape E-City Ultra and the upgraded Ape FX Maxx — Graffy emphasised the need for clear direction from the government regarding the future of subsidies.

Piaggio Commercial Vehicles Pvt Ltd (PVPL), the Indian arm of Italy’s Piaggio Group, has seen a sharp rise in L5 electric three-wheeler penetration over the past 18 months, despite the reduction of FAME scheme incentives to just one-fourth of previous levels.

"If this growth continues, we anticipate 50 per cent market penetration by late 2027 or mid-2028, even if incentives are withdrawn, because this is a structural change in the market,” Graffy said.

The electric three-wheeler market in India is categorised into L3 (e-carts) and L5 (passenger/cargo vehicles). L5 electric vehicles have been gaining traction due to improved charging infrastructure, lower acquisition costs, better financing, and servicing support.

Government support has played a role. The FAME II scheme, launched in 2019 with an outlay of Rs 100 billion and later increased to Rs 115 billion, concluded in March 2024. It was replaced by the Rs 109 billion PM E-Drive scheme to sustain EV momentum for two more years.

Despite the subsidy cuts, demand has continued to rise. In FY25, L5 passenger EVs comprised 22.8 per cent of total electric three-wheeler sales, while cargo variants stood at 21.5 per cent. In Q1 FY26, the passenger segment jumped to 32.4 per cent, and the cargo segment reached 22.8 per cent.

Graffy noted that southern and western India still show lower adoption rates, but he expects rapid uptake there in the coming years. The cargo segment, once driven by e-commerce needs, has stabilised, while the passenger segment is expanding quickly.

“This adoption is being led by a fundamental shift in the ecosystem. The passenger EV segment will continue to surge in the coming months,” he said.

Graffy also said Piaggio has aligned with market trends by renewing its product portfolio every two years since entering the EV space in 2019. “Unlike others, we do not rush frequent updates. Instead, we focus on innovation and technology with a two-year cycle,” he stated.