Electrification is widely considered as a viable strategy for reducing the oil dependency and environmental impacts of road transportation. In pursuit of this strategy, most attention has been paid to electric cars. However, substantial, yet untapped, potentials could be realized in urban areas through the large-scale introduction of electric two-wheelers. Here, we review the environmental, economic, and social performance of electric two-wheelers, demonstrating that these are generally more energy efficient and less polluting than conventionally powered motor vehicles. Electric two-wheelers tend to decrease exposure to pollution as their environmental impacts largely result from vehicle production and electricity generation outside of urban areas. Our analysis suggests that the price of e-bikes has been decreasing at a learning rate of 8%. Despite price differentials of 5000 ± 1800 EUR2012 kW h-1 in Europe, e-bikes are penetrating the market because they appear to offer an apparent additional use value relative to bicycles. Mid-size and large electric two-wheelers do not offer such an additional use value compared to their conventional counterparts and constitute niche products at price differentials of 700 ± 360 EUR2012 kW h-1 and 160 ± 90 EUR2012 kW h-1, respectively. The large-scale adoption of electric two-wheelers can reduce traffic noise and road congestion but may necessitate adaptations of urban infrastructure and safety regulations. A case-specific assessment as part of an integrated urban mobility planning that accounts, e.g., for the local electricity mix, infrastructure characteristics, and mode-shift behavior, should be conducted before drawing conclusions about the sustainability impacts of electric two-wheelers.