SuP global review of market opportunities and barriers in micro mobility

From a legal perspective, it is worth taking a look at the “UNECE Classification and Definition of Vehicles”. This provides a rough legal framework at a global level and should be taken into account when approaching the topic of micro mobility in a legal manner.

In Europe, micro vehicles are defined as vehicle class "L" - these are usually vehicles with two or three wheels. In addition, there are also four-wheeled vehicles in category L-, which may have a lower gross vehicle weight and power (kW) than passenger cars.. Regardless of the number of wheels, these vehicles are divided into subcategories such as “light” or “heavy” - and of course according to the type of drive. So let's make this a little easier and say that all vehicles with two or three wheels and all four-wheeled vehicles with legally limited weight, power or top speed are generally eligible for our further analysis.

When it comes to two-wheelers, we are talking about mopeds, scooters and motorcycles. And they dominate the global market by a wide margin: more than 80% of micro vehicles sold annually travel on two wheels.
Since two-wheelers can't really complain about a lack of analysis from well-known market observers, we would like to give you a little more insight into the three- and four-wheeled micro vehicle niche in this article.

The Indian market is electrifying
But can we even speak about a “niche”? It is worth taking a look at the Indian roads: around 400,000 units are sold here every year (and the trend is rising).
That doesn't sound like a niche market. However, in the important mobility markets of Europe and North America, the light three- and four-wheelers actually live in the shadow of their two-wheeled relatives: taken together, Schlegel und Partner currently estimates that only around 200,000 units are sold per year in both regions. But here too - as in India - the sales trend is steadily rising!The most typical application in India is the use of light three-wheelers as a means of passenger transport on the "last mile". You arrive at your station by subway and still have 1-2 kilometers to walk. What do you do then? You call a rickshaw and have yourself chauffeured home in comfort. So far, so familiar!
But the story is far from being told, because one development is of enormous importance for this market: the electrification of the powertrain. Already this year, more electric three-wheelers will be sold in India than those with combustion engines - and the trend is rising sharply! In addition, the Indian government is promoting this development with state funding programs and is making the purchase of electric models increasingly attractive for small businesses.
But it is also true that the Indian market is extremely cost-driven - the purchase price for a light three-wheeler is only around 50% of the price for a comparable vehicle in Europe or North America.

Europe is a pedelec country
If we talk about typical European use cases, they look vastly different from those in India - the rickshaw as a mobility solution for the last mile of passenger transportation? Forget about it.
As established as this type of transport may be for parts of the Indian population, it is practically non-existent for Europeans. It's actually a shame, because at least in the big cities, this type of transportation would certainly be beneficial for achieving the European Union's climate goals.
In recent years, Europeans - especially Western Europeans - have discovered another micro-mobility vehicle: the cargo pedelec (vehicles that are moved by muscle power with the support of an electric motor).
Admittedly, the majority of cargo pedelecs are single-track, i.e. they travel on two wheels. Nevertheless, three- and four-wheeled pedelecs have a market share of over 60% among three- and four-wheeled micro vehicles in Europe - and the overall market is growing.

The three- and four-wheeled pedelecs are ideal for one application in particular: last-mile delivery. Whether it's parcels, fresh groceries or pizza from your favorite Italian restaurant - the delivery person can get almost anywhere with the pedelec, park the vehicle almost anywhere and even ride on the bike path - a huge advantage over passenger cars and light commercial vehicles in the city!
We have not yet mentioned two aspects:: all micro-vehicles registered in Europe have an electric powertrain, and are therefore carbon-neutral during operation.
And: in contrast to India, the European market is more value-driven and not so much cost-driven. The entry-level prices for light and heavy tricycles are €7,000 and €15,000 respectively.

The USA is catching up
Now we come to the land of large SUVs and pick-up trucks. Is there any room for micro mobility between Dodge Ram and Tesla Model Y? Well, so far it has led a niche existence: most micro vehicles in the US are off-road, meaning they are not street legal at all. We're talking about golf carts or light four-wheelers that chauffeur passengers around the university campuses.

In addition, the technology is often a bit outdated; these vehicles often come with a lead acid battery or even - you guessed it - with an internal combustion engine.
However, this should not hide the fact that the manufacturers have recognized the potential of the market: Light and heavy four-wheelers are an interesting alternative to passenger cars in urban areas, especially for older drivers. More and more street-legal vehicles are being developed based on off-road models. From 2024 to 2030, Schlegel und Partner expects a CAGR of around +9% for three- and four-wheeled micro vehicles in the US (with an EV share of 100% in 2030).

And what about China?
Finally, let's talk about the elephant in the room: Over 10 million three- and four-wheeled micro vehicles are sold in China every year. It’s the world's largest single market for micro mobility.
You have to let that sink in first. However, it is also true that the market is currently facing major challenges.
The legislative process in China is unclear. Planned laws were not passed, and it feels like every big city is cooking its own soup. Three-wheeler sales have been declining for several years and are expected to continue to decline. Other vehicle segments such as light commercial vehicles are expected to take market share. For end consumers, four-wheeled low-speed electric vehicles in China (A00 vehicle class) are more attractive than micro vehicles as legislation does not retard the use.
The market experts at Schlegel and Partner have dealt intensively with the Chinese market, its typical use cases and its challenges. If you would like to find out more about the complex structures of the Chinese micro mobility market, please contact us directly.

So what do we take with us from our micro vehicle trip around the world?

1. The Indian market is in the midst of electrification, which is progressing rapidly. It is dominated by light three-wheelers.
2. In Europe, cargo pedelecs with three and four wheels develop strongly - driven by last mile delivery applications and the continent's ambitious CO2 targets.
3. In North America and especially in the US, micro vehicles have a niche existence - but manufacturers have recognized potential and are developing new vehicles with state-of-the-art powertrains.
4. The Chinese micro mobility market is huge, but faces major challenges and is likely to shrink. The A00 segment will take market share from four-wheelers.

If you are further interested in the topic, we look forward to hearing from you!

Christian Junkert
Senior Consultant Mobility and Transportation
Phone +49 6201 9915 61
Mail: Christian.Junkert@schlegelundpartner.de