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Micro-mobility Market Report 2019 – 2020 Winter / Spring

Editor

Edward Benjamin eCycleElectric Consultants
Copyright 2019, 2020, eCycleElectric, (Updated April 24, 2020)

Preface: This report was written, mostly, before the Pandemic.

As of Mid April 2020: It appears that share scooters may be even more challenged than before.
It appears that share ebike systems may benefit from the desire of commuters to avoid mass transit. Imports have not had time to reflect changes.

Anecdotal reports from retailers, distributors, and brand managers in the USA indicate that ebikes and normal bikes (as well as service parts) are selling extremely well. This is thought to be fueled by a great deal of recreational / fitness riding plus the expectation that mass transit will be carefully avoided in major metropolitan areas for some time.

Table of Contents

Part 1: Definition and classifications of light electric vehicles

“Light Electric Vehicle” usually refers to 2 and 3 wheel vehicles that are battery electric and operate in a power range of 5 KW or less. This definition has changed over time, and differs between users. The term “LEV” sometimes refers to a “low emissions vehicle”.

The most economically important LEVs are electric bicycles, followed by electric motor scooters equivalent to a small displacement ICE scooter. Additionally, small electric two wheel scooters that the operator stands on (no seat), which are referred to as “electric mini scooters” are now a significant part of the LEV mix, especially in share bike / scooter systems.

Electric Bicycles are defined in eCE reports in accordance with the legal definition of an electric bicycle in the market that we are discussing. The term actually covers a variety of vehicle paradigms.

1. In the USA, an electric bicycle is defined by federal law and governed by the CPSC. This definition is further developed by state and local laws, as described in the attachment to this report on regulations. The industry increasingly uses the California model of categorizing electric bikes in three classes. https:// peopleforbikes.org/our-work/e-bikes/

22 states in the USA now use this model, as promoted by People For Bikes (Funded by the USA bicycle brands and their suppliers).

California, Washington, New Mexico, Colorado, Arkansas, Illinois, Michigan, Ohio, Rhode Island, Washington DC, Tennessee,

Georgia, Idaho, Indiana, Maine, Maryland, New Hampshire, New Jersey, Oklahoma, South Dakota, Texas and Wyoming.

A variety of laws are found in the states that have not yet adopted this model. The Federal definition of a Low Speed Electric Assisted Cycle is that it has power of no more than 750 watts, a functional human powered pedal system, and a top assisted speed of 20 MPH and otherwise conforms to the CPSC requirements for a bicycle. In many of theses states, the class 3 electric bike, or speed pedelec, is accepted. This is outside the Federal definition.

https://peopleforbikes.org/tag/e-bikes/

https://www.cpsc.gov/Business–Manufacturing/Business-Education/Business- Guidance/Bicycle-Requirements

https://www.federalregister.gov/documents/2003/02/12/03-3423/ requirements-for-low-speed-electric-bicycles

A variety of other vehicles, such as the Organic Transit ELF have been recognized as electric bikes.

  1. In the EU, electric bicycles are defined as Electric Pedal Assist Cycles or EPACs. They are governed by EU law which may be further developed by member states. The following link will explain the establishment of that law. Up to date details are in the regulatory attachment:

https://ec.europa.eu/energy/intelligent/projects/sites/iee-projects/files/ projects/documents/presto_fact_sheet_legislation_en.pdf

In the EU there are vehicles, such as the speed-pedelec, that look like bicycles, but are homologated as “type approval” vehicles. To gain a certificate of type approval, they must be tested by an appropriate third party testing agency. TUV is a good example of such an agency.

https://en.wikipedia.org/wiki/Vehicle_category

In general, for the EU, electric mini scooters require type approval. And as in the USA, the local laws are increasingly restrictive of such. Each member state and each locality differs.

  1. In Asia, most electric bikes are bought from China, and thus conform to Chinese laws. The basic definition is a 250 watt, 16 mph, bike with pedals. But there are additional rules as described in the regulatory attachment. Japan, however, was the first market to embrace electric bicycles, and has very different paradigm from China.

China has detailed homologation requirements, with varying degrees of compliance nationwide.

Japan homologation of electric bikes is complex, and seemingly designed to keep most foreign companies and products out of the market.

  1. In Africa, Middle East, and Latin America, electric bicycles are usually bought from China, and thus usually conform to Chinese law. Many of these markets have not yet created regulations to govern electric bikes. Some have and are unknown to eCE due to language. Since price is important in these markets, the least expensive domestic China products, usually with little or no adaptation to local requirements are favored.

Electric Motor Scooters / Motorcycles / Electric Mini Scooters

In the USA, electric two wheelers that exceed the performance of definition of electric bicycles are regarded as motorcycles and must conform to the same regulations. These regulations are described by NHTSA (National Highway Traffic Safety)

https://www.nhtsa.gov/importing-vehicle/importation-and-certification-faqs-0 In the EU, the such electric two wheelers are “Type Approval Vehicles” and

subject to the categorization and requirements of the type approval system. See

attachment.

https://ec.europa.eu/growth/sectors/automotive/legislation/motorbikes-trikes- quads_en

https://en.wikipedia.org/wiki/Electric_motorcycles_and_scooters

In the rest of the world, most electric motorcycles must conform to the homologation requirements for ICE motorcycles of similar performance.

Electric Mini Scooters in the USA

The laws governing such vehicles are not as clear as other categories. While NHTSA is quite clear about vehicles capable of 20 MPH:

“The importer of a small motor scooter must file an HS-7 Declaration form with Customs at the time of entry on which it must declare whether the motor scooter is a “motor vehicle,” and if so, whether it complies with all applicable FMVSS. If the motor scooter is capable of a top speed of 20 mph or greater and is equipped with components (such as lights, mirrors, and turn signals) that are needed for on-road use, NHTSA will regard it as a “motor vehicle.” To be imported without restriction, a motor vehicle must be manufactured to comply with all applicable FMVSS and bear a label certifying such compliance that is permanently affixed by the vehicle’s original manufacturer. Such a vehicle is entered under Box 2A on the HS-7 Declaration form. A motor vehicle that was not originally manufactured to comply with all applicable FMVSS, or was not so certified by its original manufacturer, can only be lawfully imported if it is determined eligible for importation by NHTSA and is imported by an RI or by a person who has a contract with an RI to bring the vehicle into compliance with all applicable standards after importation. Such a vehicle is imported under Box 3 on the HS-7 Declaration form. Small motor scooters that are incapable of a top speed of 20 mph or greater may be lawfully entered under Box 8 on the HS-7 Declaration form as vehicles that were not primarily manufactured for on-road use. Such low-speed scooters can be entered in this fashion even if they are equipped with components (such as lights, mirrors, and turn signals) that are normally found on vehicles intended for use on public roads.”

The companies that provide shared electric mini scooters have been working toward uniform state and federal laws to define and regulate such. Bird and JUMP are prominent in this effort.

Electric Mini Scooters typically fall into this description:

Scooters that are not motor vehicles

The following scooters or scooter-like vehicles are not “motor vehicles” that must be manufactured to comply with all applicable FMVSS and be so certified to be lawfully imported into the United States:

Some States and Local Laws further regulate this category:

Stand up scooters that do not attain 20 MPH are often subject to laws originally written for go-peds, or mini scooters from two decades ago. The recent experience with such scooters and share systems that put large numbers of them on the street – with injuries resulting from inexperienced riders, small wheels, and inappropriate usage – has resulted in frequent changes at the state and municipal level.

Here is Florida (for example):

https://www.flhsmv.gov/handbooks/EnglishMotorcycleHandbook.pdf

This handbook states: “Motorized Scooter: Any vehicle not having a seat or saddle for the use of the rider, designed to travel on not more than three wheels, and not capable of propelling the vehicle at a speed greater than 30 miles per hour on level ground. ”

“3.2.5 – Motorized Scooters: (Not Legal on Public Streets or Sidewalks) Though considered motor vehicles in section 322.01(26) Florida Statutes and tag/registration law, the registration laws do not provide for registration of these vehicles, thus they cannot be operated on public streets or highways. If operated on a public roadway anyway, regardless of a person’s age, law enforcement officers can require the person to show at least a valid operator (Class E) license as per driver license law they are considered motor vehicles (Statute Ref: s. 322.03(1) and 322.01(26). F.S.)”

Other LEVs

Self balancing mono wheels, Segway like “human transporters”, three wheelers like TRIKKE, All in One Wheels, (AIO) , DIY kits, scooters such as YikeBike, and others usually fall outside of existing regulatory frameworks. At this time, most of these enjoy limited markets. In some cases, regulations to allow the use of these has been created.

BACK TO TOP

Part 2 Market Size and Forecast of Ebike World Wide Industry

Market Size and Forecast of Ebike World Wide Industry

Electric bikes market world wide:

eCE believes that electric bikes will replace most light motorcycles, most mopeds, most motor scooters, and most human powered bicycles. The resulting sales will be above 130 million units per year.

Hannes Neupert, an expert on the world market, said it well:

“According to my expectations the annual pedelec production will cannibalize the majority of the bicycle and grow to annually 250 million sales approximately 2050.”

Hannes Neupert, Chairman ExtraEnergy e.V.

Summary for World Market: Anti Dumping Duties and Trade War Tariffs:

To understand the world market, it is important to understand the changes created by the EU Anti-Dumping Duties, and the USA Trade War Duties. These two forces have reduced complete electric bike exports from China dramatically. And in most cases, failed to create local manufacture or fabrication of electric bikes. When electric bikes are assembled, almost everywhere, they are assembled from Chinese parts.

Chinese component makers are still doing well, but their direct customers changed from Chinese OEM and ODM factories to factories in Taiwan, Vietnam, Cambodia, Portugal, and other places that do not suffer from the duties imposed on China.

Electric bike sales and use are increasing, and quickly, but we must believe… more slowly as a result of these duties. The effect has been to raise the price of electric bikes, no matter where manufactured, due to lower efficiency, higher costs, and the opportunity to raise prices on locally assembled bikes rather than compete with the highly efficient and low price product supply from China.

In China, the market has plateaued, and the estimated 25 million units (for domestic use) in 2019 represent mostly replacements for existing vehicles, not an expansion of the fleet. (This estimate comes from component makers.)

(A competing estimate is 35 million units for domestic Chinese market, from China Bicycle Association – a government agency responsible for such information.)

The CBA estimates that about 270 million electric bikes are in use in China, and with a life expectancy of 5-10 years for such bikes.

Exports of complete bikes from China have dropped to about a half million. (Exports of complete bikes from Taiwan have been growing so fast it is hard to get data.) Complete bikes are being assembled from Chinese parts in Vietnam, Portugal, Cambodia, Algeria, several countries in Eastern Europe. Numbers for these are obscured deliberately by the producers. Vietnamese suppliers are unable in most cases to take on new customers, since they are at capacity. (And unwilling to add capacity due to the lack of predictability created by the trade war.)

The unit numbers of motors / batteries or CKD bikes is not tracked by CBA. But we know that most electric bikes made anywhere in the world are built from Chinese components.

Electric bikes in USA

Acceptance of electric bicycles is accelerating quickly in the USA. Bicycle dealers, who have been generally resistant to ebikes in the past, have become generally accepting of them in the last two years. Ebike retail specialists are increasing in numbers, sales volume, and business acumen. Direct to the consumer via the Internet (Amazon is a major part of this) is the largest unit volume channel. But not the largest dollar channel. Major bicycle brands are gaining market share, becoming more than half of ebike sales by units, and much larger share of dollars.

The USA estimate for 2019 is: Totals: January – December 2019 278,000 units. Imports January – December 2019

Electric Bicycles IMPORTS just by description: 274,000 (ADD 4K FOR USA ASSEMBLY)

Imports USA 2020 Spring January -March 50,262

The characteristics of the USA consumer indicate to eCE that the USA will become the largest dollar market for ebikes, and a larger unit market than any other nation outside of Asia. The margins required by brand managers and retailers, even on line retailers, means that the USA market will make more profit than Asian markets. (But less than EU markets)

Throttles, hub motors, and direct-to-the-consumer are all factors that have been under appreciated by the major bike brands, and some system providers. The buyers of ebikes in the USA are members of a much larger demographic than the buyers of major brands of bicycles sold by IBDs.

USA will soon be at 1.5 to 2 million ebike units per year, and will grow to about 15 million units per year over time.

Growth rate is not stunning, but it is steady, in spite of resistance (in years past) inside the bike industry, and the trump tariffs.

Electric bike share systems are growing rapidly. At present, nearly every large city in the USA has a share bicycle (manual bikes) system, and eCE believes that most of these units will be replaced by electric bikes.

Europe

A conservative estimate of EU bikes sold in 2019 is about 2 million, and it is likely that late arriving information will bump this to closer to 3 million.

The largest unit volumes in EU, according to Bike Europe Magazine are, in likely order: Giant Bicycle (selling though several brands as OEM, and ODM, plus their OB sales) 600,000. Followed by Accell Group @ 409,000 and Pon Group @ 360,000. Note that there are many additional brands in EU, so a figure of at least 2 million seems solid and likely many more units were sold.

Japan

About 650,000 ebikes, most are manufactured now in China, (Giant Kunshan) and sold under the Panasonic and Yamaha brands. Almost all are for personal transportation.

Most are equipped with basket, many with baby seat.

India

eCE has sorted through a number of interviews and published articles in Indian press. The range of claims is very wide. The high is 800,000 units.

However, our estimate is 500,000 units for 2017. Hero, Mahindra, Electro Therm, various importers

From Naveen Munjal, CEO of Hero Eco a few weeks ago.

• FY 18-19 (April 1, 2018-March 31, 2019)

• FY 17-18 (April 1, 2017-March 31, 2019)

SE Asia

Vietnam, Cambodia, and Thailand are major producers of bicycles including ebikes for export to EU and North America. Domestic use numbers are hard to find.

eCE believes that SE Asia in total buys about 800,000 units of electric bikes for domestic use, all countries combined.

Taiwan

Taiwanese companies, especially Giant, Merida, Taioku, Fairly, and others are major producers of electric bikes in several Asian countries. Most bicycle factories in Asia and South Asia are owned, operated, or staffed by Taiwanese bicycle industry people.

However, very few electric bicycles are used by Taiwanese. They prefer motor scooters and several excellent choices are offered by Gogoro, KYMCO and others.

https://www.kymco.com https://www.gogoro.com


Rest of the World

Several sources described “Rest of the World” ebike sales as totaling about 3 million units. eCE has not validated this yet.

Market Size and forecast Africa

Total market size 2017 probably below 20.000 but potential is huge but still sleeping. Pay by use solutions are the key to growth here. But the requirements in terms of maintenance free solutions may be still difficult to tackle today.

Sharing and cargo bikes are an unknown but large future market.

Market size and forecast Latin America

Columbia, Brazil, Argentina

Latin America uses motorcycles and to a lesser extent (depending on country) bicycles. This culture combined with the strong interest of Chinese businesses and government to encourage the use of ebikes (to address trade balances) The quantities are difficult to ascertain, but are likely to total about 100K.

Market size and forecast Middle East

Israel, while a small country has a vigorous market for electric bikes. Data is limited, but the imports for 2017 about 35,000.

Other markets in the middle east exist where individuals that may not drive an auto, or in some cases, are provided an electric bike by their employer, exist. But the quantities are likely less than 20K in total.

Chinese companies report significant sales to Turkey, but no specific numbers.

Market forecasts

Market drivers and trends are increasing, not decreasing.

eCE has been predicting 120 – 125 million units per year of LEVs (note that this includes electric motorcycles / motor scooters, as well as electric bicycles) by 2025. This prediction depends partly on market forces and partly on an expected government action leading to banning of ICE (Internal Combustion Engine, or Gasoline ) light motorcycles in South and SE Asia. This will include both 2 and 4 stroke engines. Also LPG powered two wheelers.

Comment on the paragraph preceding: The increasing power of green movements focused on climate change issues will, in our opinion, result in ever more restrictions on ICE engines, particularly in countries that rely heavily on ICE motorcycles. The increasing investment by auto companies in electric vehicles and the success of Tesla and others will make this every more palatable and inevitable.

Without the ICE ban – eCE predicts about a 10% increase in the world market each year. China and Japan will plateau, Europe will level off at about 5 million units per year, the USA at about 3 million units per year. But the rest of the world will increase from near 0 today to about 1/2 of all two wheelers becoming electric.

A replacement of all ICE light motorcycles would be roughly 65 million units per year.

Some notes: Chinese ebikes are the largest unit volume, and eCE estimates the life of such Chinese domestic bikes as 5 to as much as 10 years. This means that a large percentage of the sales in China are replacements for existing bikes rather than increases in users.

eCe believes that about 25 million domestic Chinese bikes are such replacements. The China Bicycle Association believes that 270 million Chinese use electric bikes on most days.

eCE believes that electric bikes in Europe have a much longer useful life, since most of them have lithium batteries, and are used less often than the Chinese bikes. eCE believes that about 10 million pedelecs are in use in Europe, although not every one is used every day. This number of 10 million was also posed by Bosch representative Claudia Wasko.

About 1.5 million functional electric bikes are present in North America, but ridden less often than in Europe.

Electric motorcycles / motor-scooters have become viable in the last few years. There is a large field of companies offering such product now, and the utility of such product has become satisfactory for most users, as has the price.

While unit sales of such motorcycles / motor-scooters are still modest, eCE believes that the approx. 65 million ICE (internal combustion engine) units sold each year will be replaced by electric as a result of both user preference / economy and government encouragement.

It is worth noting that most such ICE units go to the motorcycle cultures of South and SE Asia, with significant numbers going to EU, Latin America, and elsewhere.

Since the time that eCE created this expectation of ICE two wheeler and manually powered bicycles being replaced by ebikes, we have seen the addition of share bike systems. This is bringing more users into the market, and the effect on unit sales of vehicles, short term, is large. Long term, uncertain.

Some other views of the world market and it’s future:

Worldwide Electric Bike Sales (Estimates) From EBWR, Frank Jamerson PhD.

Year

2015

2016

2017

2018

2019

Australia

35,000

50,000

75,000

80,000

82,000

China

32,000,000

32,000,000

33,000,000

30,000,000

25,000,000

India

22,000

40,000

75,000

130,000

170,000

Japan

467,000

551,000

570,000

600,000

620,000

Europe

1,715,000

1,820,000

2,013,000

2,132,000

2,200,000

Taiwan

40,000

41,000

42,000

42,000

42,000

SE Asia

140,000

180,000

220,000

250,000

280,000

USA

140,000

220,000

250,000

260,000

270,000

Rest of World

200,000

300,000

400,000

500,000

600,000

Total

34,759,000

35,202,000

36,645,000

33,994,000

29,264,000

Market of Pedelecs today – Part 1 “Today, we have only a few pedelecs sold in five main markets:

  • China about 35 million units annually (average retail about 200 euro unit)

Currently, the Chinese government has a very big program to push electric bike sales by making all of the about 300 million bikes legal.

  • Europe about 2 million units annually (average retail about 2600 euro unit)

Manufacturers are in trouble to make enough to fulfill the market demands.

  • Japan 0.7 million (average retail about 950 euro unit)

In Japan, it is quite stable for about ten years, very similar products all over the time.

  • USA 0.5 million (average retail about 1700 euro unit)

In USA, the amount of sold pedelecs is going up.

  • ROW (Rest of the World) about 3 to 5 million (average retail about 450 euro unit)

http://extraenergy.org/main.php?language=en&category=&subcateg=&id=101140

History

An electric bike patent was recorded in the late 1800’s, and examples were on the roads by 1909.

But today’s commercially successful electric two wheelers date from 1994, when a convergence appropriately priced PWM controllers, DC motors, MOSFETs, and Hall Sensors allowed practical electric bikes. When the price of lithium batteries fell in the early 2000’s, the category took off.

The book Electric Motorcycles and Bicycles by Kevin Desmond is a good record of this.

https://www.amazon.com/Electric-Motorcycles-Bicycles-Including-Monocycles/dp/ 147667289X/ref=sr_1_3?keywords=kevin+desmond&qid=1578236896&sr=8-3

Future of electric bikes:

Most analysis and prediction of electric bike market growth have focused on ‘electric bicycles as personally owned’ and not on share bike systems.

The effect of share bike systems on the market of both bicycles and electric bicycles is yet to be determined. There are some who believe that share systems will mean the end of most personally owned bikes.

This idea comes from observation of what has happened in China, where the myriad of black, personally owned, transportation bikes have been largely replaced by brightly colored share bikes that are less of a concern for the rider. No need to worry about theft, damage, or a parking spot. No need to maintain.

For transportation use, this may be the future. And share bikes and mini scooters offer much more convenient short distance transport in urban environments than either a personal vehicle or by foot.

The implication is that fewer electric two wheelers will be needed, and most bought by share systems.

However, major parts of the ebike market are now speed pedelecs and eMTB bikes that are not offered, (except in rare instances) by share systems. And these vehicles are performance oriented, requiring more rider knowledge and skill.

It is also the opinion of eCE that share systems in the western world will create additional use, and not normally replace or prevent the purchase of personally owned vehicles.

The purchase and replacement cycle for electric two wheelers will differ greatly between share systems and personal purchases.

Personally owned manual bikes resemble a ‘forever’ purchase. Bikes that are decades old are still in use, or brought back into use when needed. But the battery and electronics on an electric two wheeler can limit the life of such vehicles. A battery that is still working 10 years after purchase may be possible, but at this time it is not common. And electronics of all sorts are more vulnerable to corrosion, dampness, and damage.

eCE observes hat personally owned ebikes in China – where they are used every day in most cases – are replaced between 5 and 10 years after purchase. Batteries are replaced every year, or as needed.

Share system ebikes and scooters are not prevalent enough, or in service long enough to have firm data, but eCE believes that such vehicles will be replaced somewhere between 1 and 2 years of service.

A rough guide would be that a consumer may buy 1-3 electric bikes in their life, and a share bike service will replace their fleet every 2 years. A share electric mini scooter fleet will replace their fleet every year, or even more often due to theft and abuse.

The prediction of annual sales for electric bikes by eCE: 125 million per year by 2030.

Note: eCE used to believe that gasoline two wheelers would be largely phased out by law in most countries world wide, by 2025. We still believe this will happen, and that these vehicles would be replaced by, mostly, electric bikes (including speed pedelecs). This would add about 65 million units per year.

The rapid cycling of share system fleets will cause the 125 million units – or more – to occur with or without the need for government action forbidding gasoline two wheelers.

Key Development Drivers

  1. Increasing urbanization of humans is making road space, parking space, noise and air pollution ever more important. This is resulting in more mass transit (trains, buses, light rail, metro, etc.) and micro mobility solutions for the first and last kilometer.
  2. Green initiatives are now becoming emergency efforts with great urgency. Electric and human powered vehicles are obvious and important tools for this change in human transportation.
  3. The price of fossil fuels is increasing and is volatile, while renewables such as wind and solar are decreasing and are stable.
  4. On and off road facilities for two wheelers are improving around the world, especially in big cities.
  5. Recreational use (eMTBS) is now an important and growing part of the industry.
  6. Cargo bikes are barely practical with only human power, but quite viable when electric power is added. This will reshape local parcel delivery, which is replacing some brick and mortar retail and traditional distribution methods.
  7. Regulatory enablers: Many jurisdictions have increasingly friendly regulations for electric two wheelers.
  8. Subsidies: Many subsidies at various levels come and go, but are more common as time passes.

Segmentation of ebike sales by category

eCE regards categories of ebikes for North America as being these:

Transportation as primary or occasional use: 70% Recreation 28 %

Retiree park cruising as as subset of Recreation 10% eMTB as a subset of Recreation 20%

Other 2%

Price analysis Past and Future

Price Analysis – Past

The price of electric bikes in the major markets over the last 20 years has not changed a

great deal, but the value to the consumer has practically doubled. 

The 1200-Euro (then actually priced in Marks or Francs) bike of 1996 has evolved into

the much better, more sophisticated, and more durable electric bikes of today for 1200

to 1400 Euros. There are more expensive bikes, (up to 40,000 Euros) and the prices have fluctuated by about 500 Euros. November numbers from Bike Europe indicate that the average selling price of the better ebike in Europe (from Accell or Pon) is about 2,000 Euros.

The $999 USD bike from EVG (USA) in 1998, has evolved into the $1500 USD ebike from Rad Power of today, but with lithium batteries, better motors, better styling and lower

weight. There are more expensive bikes available, above $7000 USD, from many brands

– some of them are eMTBs (electric mountain bikes) at higher prices, others are simply

very nicely equipped and designed bikes.

A year ago, the USA saw a shift from the largest unit volume being in the 600-999 price range to being 1500-2500 range. eCE believes this reflects consumers learning to value the better bikes.

Starting in 1994, electric bicycles in Japan were offered at about $1000 USD. These bikes have improved, incorporating lithium batteries as they came available, (originally the bikes used Ni-Cad, later NiMH), and the price fell to $750 USD for the most popular models, and then rose as power and battery improved to an average of 1000 USD again. 

In 1996, the was a widespread belief amongst Europeans and North Americans that ebikes – at that time only available in very small numbers at relatively high prices to the west – must be offered to the consumers at very low (sub-$500 USD) prices, a belief triggered by the existence of the $350-450 USD Chinese domestic electric bikes. The low price of the Chinese domestic bikes was enabled by the use of Lead Acid batteries, which due to their limitations in capacity and weight, were not regarded as attractive to most western markets – and thus while a very cheap bike may have had an attractive price, the performance was disappointing, and were thus poorly received by consumers.

In 2001, when Sparta (Holland) introduced the Ion models at above 2000 Euros, it became the best seller in the EU within a few years. The difference was that it had been designed to meet the performance expectations of consumers – who, once their expectations had been met, were willing to pay a higher price.

Prices today:

USA low of 600 USD to 12,000 USD, with average about 1700 USD

Europe low of 500 Euros to 40,000 Euros with best sellers about 2,000 Euros. China 175 US to 600 US, with best sellers about 450 USD.

Top E-Bike Brands and manufacturing companies in NA, EU, and Asia (See spreadsheet labeled “E-Bike Brands, OEMs, ODMs, World Wide 2019 attached to this report)

Barriers to Entry

  1. The emerging barrier to entry today is adapting to new distribution and service concepts. A small number of entrants are creating new paradigms / business models. But most are trying to operate inside models that have been outmoded, or are so well served already that there is little opportunity. eCE regards the biggest challenge is for the entrepreneur / founder of a new business to be ready to adapt or innovate in a market that is easily perceived to be staid and old fashioned. Most bicycle industry veterans are finding it very difficult to accomplish this.
  1. Access to Distribution – A big problem for start-ups. Consumer direct over the internet has both great opportunities and great limitations (such as no test rides). Conventional bicycle brands have hundreds to thousands of retailers, as well as online channels. For those retailers, product offered by their long-time established supplier is more attractive than product from a new brand – in most cases.

To the retailer, the established supplier is a known quantity. That supplier almost certainly offers extended payment terms, has a warranty and coop policy that the retailer is familiar with – and then there are the personal relationships as well.

When a new brand is presented to such a retailer (some of the established retailers are multi-generational stores, some are more recent, some are mass merchants, some are online or catalog merchants) the brand needs a compelling product, or a marketing program that results in consumers demanding the product from the retailer.

  1. Access to Capital – A limitation for most start-ups and many older companies. A new vehicle development can easily run hundreds of thousands to millions of dollars, and filling a distribution channel takes similar amounts of capital. eCE estimates that a minimum of 3 million US is needed to launch a new brand.

3.Access to Personnel – The electric bicycle industry has expanded rapidly, and there are few experienced engineers, marketers, or brand managers. Most personnel are learning as they go – at this time.

  1. Access to Suppliers – Qualified suppliers are limited. While an initial glance at the business may give the impression that among the hundreds of brands and factories in the world, there is a near-infinite supply of sellable product -but the actual case is that truly good makers of ebikes are relatively few, perhaps only a couple dozen in total, and they are too busy to take on new customers unless a compelling case exists.
  1. Patents – There are a few desirable features and technologies that are controlled

by patents, the most notable ones concerning battery box locations in frames, and torque sensors. Software paradigms and patents are emerging as issues.

  1. Engineering – Designing these vehicles is outside the competency of bicycle and motorcycle makers. The lessons that need to be learned about the vehicles, supply chain, and systems integration can add a couple of years to development.
  2. Anti-Competitive Moves – See the recent anti-dumping complaint authored by large EU brand managers, and the anti-circumvention complaint authored by an EU components supplier.

Market Opportunities

Distribution Channels in Major Markets

European Union

Almost every bicycle brand in Europe has electric bike (pedelec) models in their line today. A number of brands that specialize in electric bikes exist as well.

Many of the EU brands own and operate factories in Europe that assemble – mostly from Chinese parts – complete bikes inside the EU. These factories are found in most of the EU member states and are legacies of past local manufacturing. This creates a different dynamic in the supply chain from many other markets.

Anti-dumping duties apply to normal bicycles imported into the EU, and this supports those local factories by protecting them against competition with cheap Chinese imports.

In January of 2019, Anti Dumping duties were applied by the EU to Chinese electric bikes. (There is also an anti-Circumvention complaint in process.)

https://www.bicycleretailer.com/international/2019/01/18/eu-imposes-stiff-anti-dumping- duties-chinese-e-bikes#.XhIDRC-ZO18

The dominant distribution channel in the EU is through conventional bicycle dealers.

These are small companies, in some cases multi-location, in some cases

multi-generational, that buy their bikes in small quantities from brand managers, or local / regional / national distributors. Such retailers often have a strong relationship and identity dependent upon the famous brand. Many of these retailers do not order a bike until it is sold to a consumer.

Other formats of retailers exist, such as online, or multi-channel (Example IGH in Holland). A relatively small number (when compared to the conventional bicycle dealer) of ebike specialist retailers exist.

Big box retailers, or supermarkets, such as Carrefour, Media Markt, Halfords, are an increasing outlet for electric bikes – generally at lower price points than the conventional bicycle retailers.

An example of EU distribution is the model used by Dahon Bicycle. Production is in China, and product is shaped to more than 20 local or national distributors. These distributors handle the details of local sales. This can include homologation details, testing, local language owners manual, training for bike shop staff, etc. After sales service is primarily provided by the retailer that sold the bike.

Direct to the Consumer becoming more important in EU:

Canyon Bicycles (Germany) sells direct to the consumer:

https://www.canyon.com/de-de/

International Bicycle Group (Holland) has a hybrid system of stores, delivery trucks and direct over the internet.

https://www.fietsenwinkel.nl

USA

Most of the USA bicycle brands now offer electric bike models. Thus most of the conventional bicycle shops in the USA now offer some electric bike(s).

Almost all USA bicycle brands buy their bicycles, complete or 85% assembled, in boxes

from factories in China, Vietnam, and Taiwan. There are no normal duties on electric bicycles, and only modest duties on normal bicycles.

The trade war has altered this….today we have 25-35% duties on bicycles and electric bikes, as well as some components for such that originate in China. This has led to a shift in sourcing to Taiwan and Vietnam.

The brands then sell these bikes directly to retailers,

often small independent businesses that operate one or a very few stores.

Electric bike specialty stores exist, and typically sell much larger quantity of ebikes (per store) compared to conventional bicycle dealers. Electric bike specialty stores often sell only electric bike specialist brands. Examples would be Pedego, Prodecotech, EVELO.

Most big box retailers in the USA offer electric bikes, usually at the lower price points.

Online retail, especially Amazon, is a major distributor of electric bikes. Bikes sold online are often assembled by truck-based bicycle mechanics, such as BeeLine and VeloFix, which have contracts with the brands and the online retailers to assemble and deliver ebikes.

The largest, by unit volume, brand of electric bikes in the USA today is Rad Power – who sells direct to consumer via internet.

https://www.radpowerbikes.com

After sales service is provided by the retailer that sold the bike, as well as the truck based mechanics. For on line sellers, the truck based mechanics may be assemblers as well.

China

Electric bicycle distribution in China is dominated by retailers that focus on specific brands of ebikes. These stores may sell more than one brand of ebike, but typically one brand dominates. Supermarkets such as Carrefour, and Tesco as well as Asian brands are also major outlets of electric bikes.

A major factor in what brands are successful in a particular market is the level of after sales service that is offered in that market. So Chinese ebike brands will establish after sales service before they open retailers.

Business models in Major Markets Advanced and Changing business models

USA

Retailer: Buy from brand managers directly, sell to consumers from a brick and mortar base, or via the internet. Distributor: Most USA distributors are the brand managers; buy from the assembly factory, sell to retailers.

On Line Retailer: Buy from Asian factory, sell and ship directly to consumer, often using contractors to deliver and service if needed.

Big one -> Direct from Asian Factory: Factory (typically in China) accumulates orders until enough exist to fill a container. Send container to a logistics company. All the bike boxes are already addressed and ready for shipment via UPS / FedEx, etc. In many cases the bikes can be brought in as individual purchases under 800 USD and thus exempt from duty.

Example: Frey Bike

http://www.frey.bike

Local Production: So far not very successful, but an example is Prodecotech, who assembles parts from China, using a free trade warehouse, then imports the bikes as complete ebikes and distributes via Amazon, brick and mortar, and direct to consumer.

https://prodecotech.com

EU

Retailer: Buy from distributors, sell to consumers from a brick and mortar base, or via the internet. Distributor: Buy from a brand manager, sell to retailers.

The Frey Bike (described in USA above), as well as direct to consumer (Canyon Bike) is emerging here as well.

China

Retailer: Buy from a factory direct. Sell to consumers from a brick and mortar base.

Advanced & Changing Business Models

Big one -> Direct from Asian Factory: Factory (typically in China) accumulates orders until enough exist to fill a container. Send container to a logistics company. All the bike boxes are already addressed and ready for shipment via UPS / FedEx, etc. In many cases the bikes can be brought in as individual purchases under 800 USD and thus exempt from duty.

Example: Frey Bike http://www.frey.bike Share bikes:

One of the most important emerging business models is the vast share bike development that is happening worldwide. The number of human-powered share bikes is staggering, and the electric bike share business is predicted by some to become larger still. Share bike operators are willing to pay a higher price for a more durable vehicle, and their bikes use many extra cost features such as GPS, 4G, integrated locks, automatically deploying kickstands, theft resistant fasteners, etc.

Truck-based mechanics are also retailers of electric bikes. Many of them will carry a couple of ebikes and offer test rides in parallel to their other activities.

Integration of omni-channel distribution in one company is increasing. Both brands that offer their bikes online, for delivery through an established dealer, and retailers that operate sophisticated online retail in combination with brick and mortar stores and truck-based delivery that is proprietary to the retailer.

Future Trends and Developments in LEV Industry

eCE believes that the basic vehicle has reached a satisfactory level, and that most future development of the product will be software and feature based.

Connectivity with phones, internet, smart watches and heads up displays will become common place features.

Vehicle to Vehicle communications, in sync with the auto industry, as well as telematics, and crash detection / summoning of help will become standard features.

Outsourcing of Manufacturing to Asia

Since the 1970’s Asia has dominated the bicycle parts and complete bicycle supply chain. In the 1970’s, Japan did this first – followed by Taiwan (which is still a major contributor today), with China starting in the 90’s. This dominance, combined with their large domestic markets, has created economies of scale that have resulted in nearly all bicycle parts being produced in China, Taiwan, and Japan.

Vietnam and Cambodia are the latest entrants. Thailand, along with Vietnam and Cambodia, have provided bicycles to the EU that are exempt from the anti-dumping duties levied on Chinese-built bikes. Almost all bicycle assembly for the world (outside of a few local plants that are usually a result of protectionist duties) now occurs in China, Taiwan, Vietnam, Thailand, and Cambodia.

See comments above about trade war and EU dumping duties. The Chinese factory expertise has simply shifted to Taiwan, and Vietnam.

The electric bicycle and electric motorcycle industry “center” for both production and market is in mainland China. Plants in Suzhou, Jiangsu, Tianjin, Wuxi, Dongguan, Shenzhen, (and elsewhere) are building tens of millions of units for the China domestic market, as well as most of the electric bikes bought in the rest of the world.

Western brand managers in the normal bicycle industry have long relied on bicycle plants in Asia to handle engineering, production, quality control, parts sourcing and nearly all other details. The western brand manager typically provides the surface design, graphics package, and specifications to an assembly plant. Often the assembly plant will specialize in production for a limited number of brands. This same practice is common to the electric bicycle industry. With most propulsion components coming from China, the brand manager usually cooperates with the assembly plant buyers to make good selection of off-the-shelf parts to be assembled for the brand.

When electric powered two-wheelers emerged, these countries and factories had great advantages. In addition, China has in-country sources for rare-earth magnets (needed for traction motors, and cleverly managed by China to keep motor production in China) and lithium salts needed for lithium batteries.

Today, most electric motors and lithium cells are made in China, and most bicycle and motorcycle components are made in China or Taiwan, which has concentrated the skilled bicycle and manufacturing engineers, along with experts on production processes and quality assurance, in Asia. Thus, very few such skilled people exist outside of Asia.

The business model and network of these Asian OEM and ODM factories has helped. Already in contact with the big bicycle brands, and used to working with start-ups and smaller brands, they readily adapted to the electric bike business. Some new factories and companies have been created to specialize in electric bikes. Most of these are very high volume and focused on the China domestic market. A few small companies, such as Taioku, or KLEVER have evolved as well.

In the last 20 years, there has been a migration of motorcycle manufacturing to Asia as well. Major motorcycle factories exist in China, Taiwan, Vietnam, and Thailand.

The only large manufactories outside of Asia are in India and Brazil. Serving primarily their domestic market, India has had large bicycle assembly plants (and have made most of their own parts). Attempts to develop maquiladora factories to build bicycles in Mexico have been unsuccessful, due to a lack of component suppliers and qualified managers / engineers.

Value Chain

Raw materials such as lithium, aluminum, lead, steel, can find higher prices in the bicycle and electric bicycle world. An example of this is the fact that the electric bicycle battery replacement market of China consumes nearly 1 billion lead-acid SVRLAs every year, which means it will pay more for lead than the automotive SLI (Starter, Lighting, Ignition) battery market.

A modest premium over commodity prices exists for materials going into electric bikes. Casting of aluminum, machining of metal parts, molding of tires, forging of aluminum and steel parts, plastic injection molding is a commodity price market. There is no premium for this step, and pricing is determined largely by the hyper-competitive bicycle component and automobile component industries.

Assembly of components into mechanical parts is a commodity business, except for a handful of premium labels such as Shimano and SRAM. Components for electrical elements, such as MOSFETs, capacitors, resistors, switches, PCB, etc. are commodity prices. Electric motors, design, winding, and assembly is one of the high margin moments in the supply chain. As is design, and assembly of motor controllers and other electronic components such as the HMI, charger, wiring harness, and such.

Since building a plant to produce cells is a great expense, and new technologies come along to obsolete those cells after a while, the next market for cells (at a lower price) becomes the traction application market. Battery cell pricing follows this pattern: The very most advanced, high capacity, cells are bought by the consumer electronics, medical, or defense industries, followed by all others. While some electric autos use large numbers of cells, the demand for 18650’s for large format batteries is dominated by the electric bicycle industry. The 3 million or so battery packages needed by ebikes, worldwide, require about 120 million cells in 2017. And since only the best of the cells are acceptable, this is a premium market for cell makers.

Battery packaging for ebikes is a high margin activity. Small runs, often unique designs and requirements creates a market for battery packagers that can be flexible, and thus command a higher price. Chargers are a category that has price pressure on a relatively small number of suppliers – so despite demands by the buyers for a lower price, chargers are a relatively high margin category. A couple of specialty suppliers provide throttles and some other items – but since these are used in large numbers by the Chinese domestic market, the margins are low. Connectors for wiring harnesses may be the

highest margin parts, but the tooling investment and the relatively small orders are an issue.

Torque sensors are a high margin item, surrounded by patent issues.

Raw Materials

Discussion: “Raw Materials” in the vocabulary of the LEV industry refers to aluminum, steel, copper, magnets, lithium salts, etc.

Most of these materials are commodities with internationally tracked and listed prices. Almost all such materials are purchased by the LEV brand managers in the form of complete assemblies of components.

Current, historical and forecast prices of the commodities are readily available, and outside of the expertise of the authors of this report: https://www.nasdaq.com/markets/commodities.aspx

Key Raw Materials

Lithium (batteries)

Rare-Earth Magnets (motors)

Copper Wire (motor windings, wire harness) Chrome-Moly Steel (parts, frames) Aluminum Alloy (6061, parts, frames) Synthetic Rubber (tires, tubes)

Lithium

Lithium metal is used in battery cell production.

https://seekingalpha.com/article/4138171-lithium-investing-2018-key-trends-lithium- mining-markets

https://en.wikipedia.org/wiki/Lithium

The worldwide increase in the demand for batteries driven by the electric vehicle, consumer electronics, and other industries is requiring large supplies of lithium metal for battery cell manufacture.

Lithium is supplied primarily by mines in South America, as well as many other places. But mostly in remote areas, or in places where political / economic stability is not certain.

This combination of increasing demand, with what is essentially a shortage of suppliers,

makes the price of lithium both important to the LEV industry, and less predictable.

BACK TO TOP

Part Three Regulations

Policy & Regulatory Evolution of the LEV Industry 

The history could be explained like this: before the 90’s, in some jurisdictions, electric two-wheelers capable of traffic speeds were considered to simply be an electric version of a moped or motor-assisted cycle (and in many places, they still are).

Then, in the early 90’s, Yamaha patented and convinced Japanese legislators to regulate an electric-assisted bicycle that measured the pedal power of the rider and then added a proportionate boost of power from an electric motor. This control scheme required the rider to be pedaling, which allowed intuitive and accurate control of motor power, as well as allowing the bike to take advantage of the high-torque “motor” of the human body. This concept resulted in the 20 KPH, Yamaha Power Assist System (PAS), released in 1993 to commercial success. The concept of both a maximum assisted speed (in KPH) and motor power limits (in Kw) to define the vehicle were part of this paradigm.  

This idea of the rider being required to pedal for the motor to run proved to be palatable to legislators in Europe as well, who subsequently created the EPAC rules in 1995. A central idea to these regulations was that any bike which conformed to the PAS or EPAC paradigms was a “bicycle” and is therefore subject to the normal rules for

human-powered bicycles, rather than those of motor vehicles (such as requiring a helmet, license plate, insurance card, etc.). They also do not need third-party testing for homologation compliance. 

China set its own electric bikes rules in 1995, with a key difference being that unlike the EU, they did not require the rider to pedal, thus leading to a plethora of electric scooters which bear next to no resemblance to human-powered bicycles. Then, in 1996, laws were instituted that would phase out ICE powered or assisted two wheelers of all sorts. The 29cc gas powered bicycle, mopeds, two stroke light motorcycles and later 4 stroke motorcycles would be banned over time. Replacing them would be electric bikes that would be regulated as though they were manual bicycles. 

The USA passed a law in 2002 which defines electric bicycles as “bicycles” and hands regulatory oversight of them to the CPSC, creating an environment similar to that of the EU, though with looser restrictions – while the requirement to pedal is not stipulated, electric bikes must have “fully-operable pedals”. Prior to this, electric bicycles were regulated as though they were “motorized bicycles” (bicycles fitted with a small gasoline

engine and throttle). Individual state laws and city ordinances complicate the matter – however, in the last couple of years, the “California Model” for state laws has spread to about 10 states and more are expected to adopt them within the next few years.

Since these early days, China, Japan, and the EU have refined their ebike laws a great

deal – allowing more power in some cases, improving safety and performance. There has been a general trend toward allowing more power, as well as creating a “speed pedelec” class of electric bikes (bikes which technically exceed the maximum speed and motor power limits) which enable better climbing and higher road speeds for consumers.

The future is likely to be a widespread adoption of the EU rules for electric bikes (rider is required to pedal), except in motorcycle cultures where a throttle is widely accepted.

Technical Standards for LEVs

Until recently, the homologation requirements of the EU, Japan, and the USA were the primary technical standards.

Now we have a standard for electric bikes by UL, as well as ongoing project by ISO and others. UL 2849 (undergoing revision)

https://www.ul.com/offerings/e-bikes-certification-ul-2849

The EU regulations such as EN15194, and the EU requirement for a 2-year warranty have made a big impact on electric two-wheelers worldwide. EN and CPSC standards for safety issues around vehicle performance, braking, and strength exist. Battery standards exist from UN, UL, ISO. These are described in the regulations section of this document.

China has detailed requirements for bikes sold to the domestic Chinese market. This is a thick book of details, in Chinese only. eCE is not aware of a translation.

–China National Bicycle Test Center has developed an extensive set of standards for domestic China market ebikes (however, these are only minimally useful when applied to products for western markets)

–The EU has well-established mechanical and strength requirements that are described in the ISO standards for bicycles and EPACs (Electric Pedal Assist Cycles)

–EMI standards and electrical standards are contained in EN15194

–The USA has mechanical and safety standards for bicycles as part of the CPSC requirements for bicycles. There are no specific electric bike standards.

–In many markets, in the absence of specific electric bicycle standards, motorcycle standards often apply

–Batteries, especially lithium batteries, have standards described in UN, UL, and ISO

–Informal, but generally used, standards for motor life (e.g. 1200 hours minimum)

–Standards that are established ad hoc by warranty requirements – which in the EU, for example, is a mandatory 2-year warranty. Due to the importance of the EU market, most component and bike makers aim for that warranty period.

Text of Regulations

European Union

For an electric bicycle to be sold in the EU, it must be proven to conform to a variety of EU regulations through a rigorous testing process conducted by an accredited testing organization. This process is described in some detail in Bike Europe’s “Rules & Regulations on Electric Cycles in European Union”. The UK follows a

“self-testing” regime, which means its E-bikes do not have to be certified by an EU authority.

REGULATION (EU) No 168/2013 of the European Parliament and of the Council on the approval and market surveillance of two- or three-wheel vehicles and quadricycles sets out the technical regulations for L-category vehicles and defines the various categories of vehicles that must comply with these regulations.

Article 2.h) excludes the following electric bicycles from this Regulation: “pedal cycles with pedal assistance which are equipped with an auxiliary electric motor having a maximum continuous rated power of less than or equal to 250 W, where the output of the motor is cut off when the cyclist stops pedalling and is otherwise progressively reduced and finally cut off before the vehicle speed reaches 25 km/h;

As a result, this type of electric bike only may be categorized by the EU member states as a bicycle and therefore made subject to technical regulations, which differ from the regulations prescribed by Regulation 168/2013. The following electric bikes still

come under the Regulation and may therefore, as far as technical rules are concerned, not be categorized as bicycles:

-Electric bikes not equipped with pedal assistance

-Electric bikes not equipped exclusively with pedal assistance

-Any electric bike with a maximum continuous rated power of more than 250 W

-Any electric bike with a maximum speed of more than 25 km/h

–

Spain deviates from the above specifications in their traffic codes, by categorizing electric bikes with higher power outputs as bicycles for the purpose of their traffic rules. Spain is still under the obligation to only allow these electric bicycles on the road if type-approved according to Regulation 168/2013.

EU Regulations EU 168/2013

Type-Approval Scheme

http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX%3A32013R0168

Regulation EU 3/2014

“technical requirements and test procedures regarding functional safety” http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32014R0003

Regulation EU 44/2014

“vehicle construction and general requirements“

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:32014R0044

Regulation EU 134/2014

“environmental and propulsion unit performance requirements”

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32014R0134

Regulation EU 901/2014

“administrative requirements”

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:32014R0901

Directive 2006/42/EC

Machinery Directive

http://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX:32006L0042

Guide to application of the Machinery Directive 2006/42/EC

400-page guide to Directive 2006/42/EC http://ec.europa.eu/DocsRoom/documents/9483/attachments/1/translations

Directive 2014/30/EU

EMC Directive

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32014L0030

Directive 2002/95/EC

Restriction of Hazardous Substances (RoHS) Directive

http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:32011L0065

European Commission explainer for Directive 2011/65/EU

http://ec.europa.eu/environment/waste/rohs_eee/index_en.htm

Directive 2014/35/EU

Low Voltage Directive

http://eur-lex.europa.eu/legal-content/EN/TXT/?&uri=CELEX:32014L0035

Directive 2001/95/EC

General Product Safety Directive

http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:32001L0095

ISO 4210

Cycles — Safety requirements for bicycles https://www.iso.org/standard/59908.html

EN 50604-1:2016

Lithium-Ion Batteries for Light LEV applications https://www.cenelec.eu/dyn/www/f?p=104:110:254852902340501::::FSP_ORG_ID,FS P_PROJECT,FSP_LANG_ID:1257217,41945,25

Directive 2012/19/EU

Waste Electrical and Electronic Equipment (WEEE) Directive

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32012L0019

Regulation 1907/2006

Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32006R1907

EU Member State National Requirements

France

Décret no 95-937 https://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000000555331&c ategorieLien=id

Germany

StVZO (Straßenverkehrszulassungsordnung)

https://www.gesetze-im-internet.de/stvzo_2012/BJNR067910012.html

Netherlands

Regeling voertuigen http://wetten.overheid.nl/BWBR0025798/2017-05-07

Spain

Real Decreto Legislativo 6/2015, de 30 de octubre, por el que se aprueba el texto refundido de la Ley sobre Tráfico, Circulación de Vehículos a Motor y Seguridad Vial. https://boe.es/buscar/act.php?id=BOE-A-2015-11722

United Kingdom

The Electrically Assisted Pedal Cycles (Amendment) Regulations 2015 http://www.legislation.gov.uk/uksi/2015/24/resources

^Amendment to: The Electrically Assisted Pedal Cycles Regulations 1983 http://www.legislation.gov.uk/uksi/1983/1168/resources

Germany

Electric bikes excluded from Regulation (EU) No 168/2013 under Article 2.h) (pedal assistance up to 25 km/h and maximum 250W) are categorized as bicycles in the Netherlands.

Bicycles, including electric bicycles excluded from Regulation No 168/2013, are defined in German traffic law as: “A bike is a vehicle with at least two wheels, exclusively propelled by the muscular power of the person on the bike with the help of pedals or hand cranks. Are also considered to be bicycles, bicycles with pedal assistance equipped with a motor with a maximum continuous rated power of 0.25 kW and of which the power is progressively reduced and finally interrupted when the vehicle reaches 25 km / h or earlier if the cyclist stops pedalling.”

The definition is here: Straßenverkehrs-Zulassungs-Ordnung (StVZO) – Article 63a Lighting requirements:

Bicycles, including electric bicycles categorized as bicycles, must have the

following lighting equipment:

●Front and rear light powered by a battery or a rechargeable energy storage unit or a combination of both. The voltage of the energy source must be compatible with the voltage of the lights.

●All lighting equipment, including fluorescent material and reflectors must be properly fixed, secured against unintended adjustment and always ready to use.

●Lighting devices may not be covered.

●Front and rear lights may be removable, but must be installed during dusk, in the dark, or when visual conditions require it.

●Lighting devices may be put together, integrated or combined, with the exception of indicators.

●Lighting devices must not interfere with each other.

●There must be 1 or 2 non-blinding front lights with white light shining to the front. Flashing lights are not allowed.

●At least one front reflector

●Lights may be supplemented with daytime running lights and with white head lights with a maximum light intensity and light distribution for the daytime running lights according to Regulation No 87 (UN/ECE) on uniform provisions concerning the approval of daytime running lights for power-driven vehicles. Switching between the light functions must be done automatically or by hand with controls in accordance with the

arrangement in accordance with the provisions of Regulation No 60 (UN/ECE) on the approval of driver operated controls.

●One red rear light

●One read non-triangular reflector of category “Z”

●The rear light and reflector may be incorporated in one unit.

●Rear lights may be equipped with a brake light function for red light with a light intensity and light distribution of the brake light in conformity with Regulation No 50(UN/ECE) concerning the approval of (…) stop lamps (…).

●Flashing lights are not allowed.

●Pedals must be fitted with front and rear amber reflectors.

●Both sides of the bike must have a ring-shaped white reflecting strip either on the tires or on the rims or white fully reflecting spokes or with

reflecting spoke sleeves or at least 2 yellow spoke reflectors in an angle of 180°.

●Front and rear light may only be switched on together if they are operated by a dynamo.

●If the parking light is switched on, the front light may be on as well.

●Bicycles with pedal assistance may have a link between the lighting equipment and the energy storage unit for the propulsion if a continuous power supply to the lighting system of at least two hours is guaranteed after discharge-related shutdown of the drive or if the motor can be used as a dynamo.

●The minimum and maximum heights for the fixing of lighting equipment are as follows:

Front light: 400 – 1200 mm

Front reflector: 400 – 1200 mm

Rear light and reflector: 250 – 1200 mm

The requirements are here: Straßenverkehrs-Zulassungs-Ordnung (StVZO) – Article 67 Traffic Law

Electric bikes excluded from Regulation (EU) No 168/2013 under Article 2.h) (pedal assistance up to 25 km/h and no more than 250W) are subject to exactly the same traffic law rules as bicycles. Speed pedelecs are subject to the same traffic rules as mopeds.

Local authorities may allow mopeds on cycle lanes. If that is the case, speed pedelecs may also use these cycle lanes.

Netherlands

Electric bikes excluded from Regulation (EU) No 168/2013 under Article 2.h) (pedal assistance up to 25 km/h and maximum 250W) are categorized as bicycles in the Netherlands, despite Dutch law having no legal definition of a bicycle. Despite this, it does have some technical requirements for bicycles to comply with:

Lighting Requirements

According to Artikel 5.6.51, § 10. Lichten, lichtsignalen en retroreflecterende voorzieningen of the Regeling voertuigen, Bicycles, including electric bicycles categorized as bicycles, must have the following lighting equipment:

●White or yellow side reflectors on all wheels. These must follow the circumference of the wheel and be mounted on or as close as possible to the rim, so that they are visible on both sides of the bicycle.

●Red rear reflector, which must be mounted between the luggage rack and the mudguard. In the absence of a luggage rack, the reflector must be mounted either on the mudguard, no less than

0.35 m and no more than 0.90 m above the road surface, or under the saddle.

●Yellow or amber yellow reflectors at the front and back of each pedal.

The light permeable part of all above-mentioned reflectors may be shielded up to a maximum of 25%.

All the above reflectors must be free of any defects that may affect their retroreflections.

The red retroreflectors and the white or yellow retroreflectors on the wheels must bear an approval mark composed of the designation NL, circled and with a serial number preceded by a letter or bearing an approval mark as shown below.

Tyres of which the sides are equipped with retroreflecting material, must bear one of the approval marks shown below.

Red reflectors must bear an approval mark as shown below or an approval mark which is composed of the designation NL, encircled, and a serial number preceded by a number.

There is no legal requirement to have any other lighting equipment affixed to the bicycle, but there is a legal requirement for the cyclist to ride with lights, front and back, from dusk till dawn.

http://wetten.overheid.nl/BWBR0025798/2017-05-07 Speed-pedelec

Speed-pedelecs are defined in Dutch law as “electric moped with pedal assistance of

which the drive continues when the vehicle exceeds a speed of 25 km/h.” in the Reglement verkeersregels en verkeerstekens 1990 (RVV 1990).

This definition is only relevant in the framework of the Dutch traffic code and Dutch legislation pertaining to helmet obligations. As for technical regulations, speed-pedelecs

come under Regulation 168/2013 and are categorized as L1e-B – moped with a maximum design speed of 45 km/h and a maximum continuous rated power of 4 kW.

Speed-pedelecs must have a yellow license plate for mopeds. Speed pedelecs put into service before the 1st July 2017 were subject to a blue license plate. These blue plates had to be swapped for yellow plates before 1st July 2017.

http://wetten.overheid.nl/BWBR0004825/2017-01-01#HoofdstukI_Artikel1 Traffic Law

Electric bikes excluded from Regulation (EU) No 168/2013 under Article 2.h) (pedal

assistance up to 25 km/h and no more than 250W) are subject to exactly the same traffic law rules as bicycles.

As for speed pedelecs however, they are currently subject to the same traffic rules as mopeds, but there is a discussion going on as to whether to allow some bicycle rules. The main issue is the use of moped/cycle paths. In the Netherlands some separated lanes are reserved to bicycles only, other lanes are open to both mopeds and bicycles.

France

Electric bikes excluded from Regulation (EU) No 168/2013 under Article 2.h) (pedal assistance up to 25 km/h and maximum 250W) are categorized as bicycles in France. Bicycles, including electric bicycles excluded from Regulation (EU) 168/2013, are defined in Decree N° 2016-364 stipulating the safety requirements for bicycles.

Article 1 of this Decree defines a bicycle as “any product comprising two wheels and a saddle and propelled either mainly by the muscular energy of the person mounted on that vehicle, in particular by means of pedals, or additionally with an electric assistance device.”

https://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000032304239&c ategorieLien=id

Lighting requirements

Bicycles, including electric bicycles categorized as bicycles, must have the following lighting equipment:

●one or more rear reflectors

●orange reflectors visible laterally

●orange reflectors on the pedals

●one white front reflector visible from the front

●at night or during the day when visibility is insufficient, the bicycle must be equipped with a front light emitting towards the front a yellow or white non-blinding light

●at night or during the day when visibility is insufficient, the bicycle must be equipped with a rear light visible from the back

These requirements are in the French traffic code, de Code de la Route, as part of article 313

Traffic Law

Electric bikes excluded from Regulation (EU) No 168/2013 under Article 2.h) (pedal assistance up to 25 km/h and no more than 250W) are subject to exactly the same traffic law rules as bicycles.

Speed pedelecs are currently subject to the same traffic rules as mopeds. Local authorities may allow mopeds on cycle lanes. If that is the case, speed pedelecs may also use these cycle lanes. Outside built-up areas, both electric bicycles and speed pedelecs are allowed on pavements or any other service road used by pedestrians.

Italy

Electric bikes excluded from Regulation (EU) No 168/2013 under Article 2.h) (pedal assistance up to 25 km/h and maximum 250W) are categorized as bicycles in Italy.

Bicycles, including electric bicycles excluded from Regulation (EU) 168/2013, are defined in Decreto Legislativo N.285 del 30/04/1992, article 50: “Bicycles are vehicles with two or more wheels that can function exclusively with muscular propulsion or by means of pedals or similar devices operated by a person mounted on the vehicle. Are also considered to be bicycles, bicycles with pedal assistance equipped with a motor with a maximum continuous rated power of 0.25 kW and of which the power is progressively reduced and finally interrupted when the vehicle reaches 25 km / h or earlier if the

cyclist stops pedalling.”

Furthermore, the traffic code lays down the following technical requirements for bicycles, including electric bicycles excluded from Regulation (EU) 168/2013:

Bicycles must be equipped with

●tires;

●for braking, an independent device for each axle, that acts in a timely and effective manner on the respective wheels;

●a bell

Lighting requirements

Bicycles, including electric bicycles categorized as bicycles, must have the following lighting equipment:

●Front white or yellow lights;

●Rear red lights and red reflectors

●Yellow reflectors on the pedals and similar reflectors on the sides. These requirements are in Article 68 of the Italian traffic code.

Traffic Law

Electric bikes excluded from Regulation (EU) No 168/2013 under Article 2.h) (pedal assistance up to 25 km/h and no more than 250W) are subject to exactly the same traffic rules as bicycles.

Speed pedelecs are subject to the same traffic rules as mopeds. In Italy, mopeds and therefore also speed pedelecs are not allowed on cycle lanes.

United Kingdom

Electric bikes excluded from Regulation (EU) No 168/2013* under Article 2.h) (pedal assistance up to 25 km/h and maximum 250W) are categorized as bicycles in the United Kingdom.

* The UK government has triggered Article 50, which formally initiates the withdrawal process from the EU. It is unknown at this time what effect this may have on UK law. However, it is unlikely for the UK to replace European harmonized technical regulations by national rules since this could hamper the export from the UK to the remaining 27 member states.

According to the current Electrically Assisted Pedal Cycles Act, for an electric bicycle to be considered a bicycle, the requirements are:

●The cycle must be fitted with pedals that are capable of propelling it.

●The maximum continuous rated power of the electric motor must not exceed 250 W.

●The electrical assistance must cut-off when the vehicle reaches 15.5 mph

Lighting Equipment

Bicycles, including electric bicycles categorized as bicycles, must have the following lighting equipment:

●A white front light, it may show a steady light or may flash.

●A red rear light, it may show a steady light or may flash. A red rear light, it may show a steady light or may flash. A red rear light, it may show a steady light or may flash.

●A red rear reflector

●Amber pedal reflectors must be fitted to the front and rear edges of each pedal.

Flashing lights must flash at a steady rate of between 60 and 240 times per minute and have a minimum intensity of 4 candela.

These rules are in the Road Vehicles Lighting Regulations. Traffic Laws

Electric bikes excluded from Regulation (EU) No 168/2013 under Article 2.h) (pedal

assistance up to 25 km/h and no more than 250W) are subject to exactly the same traffic rules as bicycles. Speed pedelecs are subject to the same traffic rules as mopeds.

Traffic rules are laid down in the Traffic Regulation Act 1984

Spain

Whereas other member states have only categorized electric bicycles excluded from Regulation 168/2013 (pedal assistance up to 25 km/h, maximum 250 W) as bicycles, the situation in Spain is slightly more complicated.

The definition of an electric bicycle, categorized as a bicycle is in Anex I.7 of the Spanish traffic code and in Anex II of Real Decreto 2822/1998, de 23 de diciembre, por el que se aprueba el Reglamento General de Vehículos: “A cycle is a vehicle fitted with at least two wheels and powered exclusively or mainly by the muscular energy of the person or persons who are on the vehicle, in particular by means of pedals. Included in this definition are the cycles with assistance. A bicycle is a two-wheeled cycle. A bicycle with pedal assistance is a bicycle that uses an engine, with a power output of not more than 0.5 kW, as an aid to muscular effort. The engine must stop when the driver stops or when the speed exceeds 25 km/h.”

The Spanish traffic code herewith deviates from the European harmonized technical regulations. It does not require maximum 250W. This means that for instance an electric bike that has a maximum power of 500 W is categorized as an L1e-A “powered cycle” in Regulation 168/2013 and must therefore be fully type-approved. However, Spanish traffic code categorizes it as a bicycle and it must therefore comply with the traffic rules for conventional bicycles.

Lighting requirements

Bicycles, including electric bicycles categorized as bicycles, must have the following lighting equipment:

●Bikes must have a front and rear light and a rear reflector. They may have reflectors on the spokes and in the pedals.

●Reflectors must be approved in accordance with UN-ECE Regulation No3.

●The lights must have a light intensity of between 4 and 60 candelas for the front light and between 4 and 12 candelas for the rear light.

The requirements are in the Real Decreto 339/2014, de 9 de mayo, por el que se establecen los requisitos para la comercialización y puesta en servicio de las bicicletas y otros ciclos y de sus partes y piezas,

Traffic laws

Electric bikes excluded from Regulation (EU) No 168/2013 under Article 2.h) (pedal assistance up to 25 km/h and no more than 250W) are subject to exactly the same traffic rules as bicycles. With that however, it must be noted that in Spain, electric bicycles with pedal assistance up to 25 km/h and a motor output up to 500 W are also considered bicycles in traffic law and must therefore follow the rules for bicycles. Speed pedelecs are subject to the same traffic rules as mopeds.

USA

For an electric bicycle to be sold in the United States, it must be regarded by Federal law to be a “low-speed electric bicycle”, and not a motor vehicle (such as a motorcycle or moped), as defined by US Public Law 107–319:

‘‘(b) For the purpose of this section, the term ‘low-speed electric bicycle’ means a two- or three-wheeled vehicle with fully operable pedals and an electric motor of less than 750 watts (1 h.p.), whose maximum speed on a paved level surface, when powered solely by such a motor while ridden by an operator who weighs 170 pounds, is less than 20 mph.”

It is incumbent upon the manufacturer and seller to be certain that the electric bicycle they are building or selling conforms to the Federal definition of electric bicycles, otherwise their product cannot be legally sold as a bicycle, and must instead meet other requirements (typically those imposed on a motorcycle or moped).

Traffic Laws

For an electric bicycle to be used (ridden) in the United States, it must also conform to

the State laws regarding the use of such bicycles. The exact requirements imposed upon the bicycle and where it may be legally ridden vary by state.

It is incumbent upon the seller to be certain that the electric bicycle they are selling conforms to the State definition of electric bicycles for the State(s) that they intend to sell their product in, otherwise their product cannot be legally used/ridden as a bicycle, and must instead meet other requirements (typically those imposed on a motorcycle or moped).

An electric bicycle in the United States must conform first to the Federal definition, and then additionally to the State definition, depending on which State(s) the bicycle is intended to be sold in. Federal law merely provides direction on what can be sold as a bicycle, whereas State law defines what can be used, as well as where and in what manner.

New York City

From “Regulations of E-Bikes in North America” by John MacArthur and Nicholas Kobel:

“New York City has an entirely different experience with e-bikes. The city’s problem is that too many speeding messengers and food-delivery persons on e-bikes and e-scooters zoom down the crowded sidewalks, which poses a threat to pedestrians’ safety (New York Office of Communications, 2013; Singer & Kilgannon, 2011).

However, the city decided to make a sweeping ban on electric bicycles through Local Laws 2013/40 and 2013/41 (New York City, 2013a, 2013b). Local Law 2013/40 defines motorized scooter to include powered bicycles (PB e-bikes):

“(a) […] The term “motorized scooter” shall mean any wheeled device that has handlebars that is designed to be stood or sat upon by the operator, is powered by an electric motor or by a gasoline motor that is capable of propelling the device without human power and is not capable of being registered with the New York State Department of Motor Vehicles.”

Local Law 2013/41 turns the focus toward commercial enterprises, stating:

“(k) A business using a bicycle for commercial purposes shall not possess any motorized scooter and shall not permit any employee of such business to operate such a motorized scooter on behalf of such business. A business using a bicycle for commercial purposes shall be liable for any violation of section 19-176.2(b) of this code committed by an employee of such business while such employee is operating a motorized scooter on behalf of such business.”

Although New York City has recently doubled the fine for using motorized scooters on public thoroughfares. Power-assisted bicycles, which are not capable of propelling the bicycle without human power, seem to be exempt from this definition. But PABs are subject to state laws, and New York State still has a ban on any bicycle with a motor.”

Japan

For an electric bicycle to be sold in Japan, it must meet the requirements set forth in The Road Traffic Law Enforcement Regulation (December 3, 1953 Prime Ministerial Order No. 60):

http://law.e-gov.go.jp/htmldata/S35/S35F03101000060.html

Traffic Law

Road Traffic Act (Act No. 155 of June 25, 1975) http://law.e-gov.go.jp/htmldata/S35/S35HO105.html

Explainer for Japanese bicycle laws (in Japanese): http://law.jablaw.org/jitensha

China

For an electric bicycle to be sold in China, it it must meet the requirements in GB 17761-1999.

Key Materials for Ebikes Lithium

eCE receives information from time to time on investment in lithium mines in Argentina and Australia. Much of the Chinese consumption of lithium comes from mines in Mongolia. Lithium as a strategic material receives constant attention. Sources seem to be multiplying.

Copper

Copper is used in motor windings and wire harnesses. Copper is expensive, used in a wide array of products, and the demand for it is only increasing.

Price is not stable, but it is widely published and studied: https://www.nasdaq.com/markets/copper.aspx

Neodymium

Neodymium is a rare earth used in permanent magnets. China uses the price and availability of Neo as a political and economic tool. The USA / China trade war may cause this to become an important factor.

https://en.wikipedia.org/wiki/Neodymium

The price of Nd has undergone big increases in the last two decades. Sources are relatively few, mining is environmentally damaging, and processing is done in only a few places.

China has the bulk of the worlds rare earths, and a long period of under-pricing of Nd caused almost all other producers to cease. Dramatic price increases occurred in 2010, and controls on the export of Nd from China were designed by China to encourage the purchase of complete motors from Chinese factories, instead of selling magnets to western motor factories.

Some other materials that might be interesting are Carbon Pre-Preg fabrics, Titanium, and Butyl Rubber. However, aside from tires, the quantities of vehicles using these materials worldwide are very small.

Finished Parts & Components

Mechanical components are usually the same parts, or the same part suppliers, as used for normal bicycles and motorcycles. Companies specializing in electric propulsion, mostly Chinese, have emerged. For example: Suzhou Bafang, the largest supplier of motors to the western market, is completely owned and operated by Chinese. In addition to this, most of the “western” propulsion system brands, such as Bosch, have most of their high-value parts, or even the entire system, made in China as well. This results in a need for close coordination and communication between the brand manager and the Asian factory managers.

cally legacy factories in Europe that assemble 100%

Chinese parts (even frames are painted in Asia) to avoid duties on complete bikes, specialty production of high-end bikes, or older factories that build a product traditionally suited to the local market (e.g. Brazil).

Key Finished Parts

Steel Tubing (painted and chromed) Hydraulic Tubing (brakes) Aluminum Tubing (frames, parts) Braided Steel Wire (brakes)

Drawn Wire (spokes)

Machined Parts (brakes, transmission) Wheel Castings

Electrical Connectors Bearings

Paint & Decals

Key Components

Frames Hubs Brakes Motors Batteries BMS

Motor Controller Vehicle Controller

HMI displays and modules Saddles

Tires, Tubes, Rim Strips Wheels, Spokes

Pedals

Bottom Bracket Parts / Torque Sensors Geared Hubs

Derailleur Gears Chains

Belts

Subcontractor Costs

Most LEVs are assembled in Asian OEM or ODM factories that buy almost all parts as finished assemblies. Most are in China, followed by Taiwan, which in turn is followed by Vietnam, Cambodia and Thailand. Examples are Fairly Bike Manufacturing, Taioku Bicycle Company, Giant Electric Vehicle, XDS, Fujita, etc.

The OEM or ODM factory often, but not always, fabricates frames from aluminum or steel tubing, and paints the frame. Factories without this capability buy the frames from frame specialists, either painted or un-painted, depending on whether the assembly plant has a paint line.

Specialized tubing, using mostly 6061 or 1020 aluminum, or even 4130 steel, are purchased from tubing suppliers, some of whom focus on sporting goods applications or bicycle applications. Examples are True Temper, Reynolds, Columbus, etc.

All other parts such as brakes, pedals, hubs, tries, spokes, seats, motors, batteries, connectors, etc. are purchased from specialized suppliers of such parts, with support from the engineering team working for the parts suppliers.

Costs to cast aluminum into bicycle parts or rubber and nylon into tires (and similar value-adds) are not within the competency of the authors of this report. We can note that 2 kilos of 6061 aluminum selling for about $4.0 as a commodity, can be turned into brakes, brake levers, stem, hubs, and other machined parts with a value ranging from

$12 – $400 USD depending upon the precision and marketing of the parts.

Parts are purchased by the assembly factory once an order is received for complete bikes. The parts are normally received by the factory over a period of time starting one week before assembly (although some factories are true Just-In-Time operations on larger orders). The parts are inspected for compliance as to specification, quality, and whether they are genuine (many bicycle parts now have counterfeit equivalents, of generally unsatisfactory quality and specification).

The assembly factory will usually claim that they pass the parts on to the brand manager buyer of the bike at their cost. A “costed bill of materials” from the factory will usually list every part, the supplier, and the cost of that part. This will include stickers, owners manual, packing materials, engineering amortization (sometimes), and every other detail. In addition to the total for all the parts, there will be a charge for assembly. This is often 11% “labor”.

But this is not usually an accurate reflection of costs. The assembly factory will attempt to mark up the component parts, usually with an objective of a 30% margin on the complete bike. When possible, the assembly factory will charge more – a simple matter of getting all that the market will bear (usually about 30% margin).

Material and Component Price Analysis

Past

The margins described above have not changed much, if at all, for OEM’s in Asia selling to electric bike specialty brands in western markets in the last 5 years.

10 – 15 years ago, an ebike assembler could price their product at virtually whatever they wished, knowing that the buyer had no idea of the actual costs – the 50 – 100% margins that could be achieved back then are now only memories.

Margins have been squeezed to very thin levels on electric bikes sold to China domestic market, and on share bikes purchased by the large Chinese dockless share bike systems. Since about 2004, the ebike assemblers of China have coalesced into a handful of very high-volume, low-margin makers.

Anecdotal information indicates that the margins for such domestic Chinese products may be less than $50 total gross margin for the entire bike for the assembler, and less than ¥50 RMB (about $8 USD) for the retailer.

Future

As western product managers become more sophisticated about the real costs of LEV components, and as volumes grow and brands consolidate, there will be greater pressure on the margins of the component makers and the assembly plants. This will, in the end, be similar to the situation with conventional bicycles today.

So, eCE predicts that margins for electric bike assemblers, which are about 30% today, will be reduced to 10-15% over the next 5 years.

Raw Materials

Finished Parts and Components Sub-Contractor costs

Material and Component Price Analysis Past and Present

Segmentation of ebike sales by category

eCE regards categories of ebikes for North America as being these:

Transportation as primary or occasional use: 70% Recreation 28 %

Retiree park cruising as as subset of Recreation 10% eMTB as a 20%

Other 2%

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Part 4 eCE Analysis on eScooter Market

eCE observes that the electric mini scooter market was mostly for toys until the electric mini scooter share systems emerged. As a toy, the market is small, and supported only one brand in the USA for years. (Razor USA).

The electric motor scooter, again being popularized by share systems, is likely to be a more important unit than electric bikes in North America. Americans have not used motorcycles or motor scooters as main stream transportation for some decades. But eCE believes that the cost of fuel, the exposure to convenience that the share systems are creating, and the low cost of electric motor cycle motor scooters will cause them to be a popular purchase.

At this moment, the market is so small as to be nearly non existent.

Share Bike and Scooter Systems

Most analysis and prediction of electric bike market growth have focused on ‘electric bicycles as personally owned’ and not on share bike systems.

The effect of share bike systems on the market of both bicycles and electric bicycles is yet to be determined. There are some who believe that share systems will mean the end of most personally owned bikes.

This idea comes from observation of what has happened in China, where the myriad of black, personally owned, transportation bikes have been largely replaced by brightly colored share bikes that are less of a concern for the rider. No need to worry about theft, damage, or a parking spot. No need to maintain.

For transportation use, this may be the future. And share bikes and mini scooters offer much more convenient short distance transport in urban environments than either a personal vehicle or by foot.

The implication is that fewer electric two wheelers will be needed, and most bought by share systems.

The purchase and replacement cycle for electric two wheelers will differ greatly between share systems and personal purchases.

Share system ebikes and scooters are not prevalent enough, or in service long enough to have firm data, but eCE believes that such vehicles will be replaced somewhere between 1 and 2 years of service.

A rough guide would be that a consumer may buy 1-3 electric bikes in their life, and a share bike service will replace their fleet every 2 years. A share electric mini scooter fleet will replace their fleet every year, or even more often due to theft and abuse.

The rapid cycling of share system fleets will cause the 125 million units – or more – to occur with or without the need for government action forbidding gasoline two wheelers.

Injuries associated with electric bikes, electric mini scooters:

Editor’s comment: Human powered bikes require a fit and skilled rider to average speeds of 20 MPH. Yet an electric bike can achieve this easily. Most human powered bicycle speeds are closer to 10 MPH, especially on the heavy and often inefficient shared bikes. So collisions are more frequent, partly due to operator inexperience, and partly due to higher speeds on bike path or other places where pedestrians and ebikes can interact.

The authors of the article below note that injuries are more severe when ebikes are involved, and they note that the speeds are higher. And they note that this is a correlation of note.

Electric mini scooter accidents are numerous in the report, and resulted in more head injuries and broken bones.

“Share Scooters Systems” may mean either or both of these vehicles, yet there are important differences between Electric Motor Scooters and Electric Mini Scooters

Not many regulations, no helmet required by law, speeds can vary widely, Cheap, distributed in huge numbers as a market share grab. Often left lying on sidewalk, often damaged or stolen. No driving license required.

Stand up, small wheel, electric mini scooters.

Driving license may or may not be required. Helmet usually required. License plate and insurance usually required. More controllable, fewer injuries.

Electric Motor Scooter – approximately equivalent to 50CC gasoline scooter. Most “Scooter Systems” are focused on mini scooters. But not all.

Stand on electric mini scooters have several inherent risks for the operator:

  1. Small wheels that are easily stopped by debris or road conditions.
  2. High center of gravity due to rider standing up.
  3. Share systems imply that the rider is inexperienced.
  4. Brakes and the stability of the vehicle during hard braking is problematic.
  5. Injuries and a reputation for injuries will make these un-insurable and too expensive to self insure.

eCE Opinion on scooter share systems: They will not be viable for long. Rumor is that they do not make money now, and that insurance is impossible to obtain for either theft or injury. This is a business that will not endure.

HEALTH NEWSDECEMBER 25, 2019 / 11:49 AM

E-bikes show distinct pattern of severe injuries

Vishwadha Chander

•

(Reuters Health) – E-bikes and electric scooters are becoming increasingly popular in the United States, but the powered bikes carry a higher risk of severe injuries than traditional bicycles and a different pattern of injury risks compared with scooters, a recent study finds.

The authors analyzed emergency department data collected from 2000 to 2017 by the United States Consumer Product Safety Commission’s National Electronic Injury Surveillance System (NEISS), on injuries involving all three types of vehicles.

While people riding e-bikes were more likely to suffer internal injuries and be hospitalized compared to the other riders, powered scooter users had higher rates of concussion. E-bike injuries were also more than three times as likely to involve a collision with a pedestrian than either scooter or traditional bike injuries, the researchers report in the journal Injury Prevention. “We don’t know a lot about the overall risks and benefits of electric-powered scooters and e- bikes,” Charles DiMaggio, the study’s lead author, said in an email.

Most significantly, the study found injuries from e-bikes in particular were more serious, said DiMaggio, who directs the injury research program in the division of trauma and surgical critical care at NYU Langone Health in New York City.

Of more than 245 million injuries reported in the study period, 130,797 involved powered- scooter accidents, accounting for 5.3 per 10,000 U.S. emergency department injuries. There were 3,075 e-bike injuries, or 0.13 per 10,000. In addition, about 9.4 million pedal bicycle injuries accounted for 385.4 per 10,000 of all emergency department injuries.

People injured by e-bikes were older, averaging 31.9 years old compared with 29.4 years with powered scooters and 25.2 years with traditional bikes.

Indeed, the largest proportion of people involved in e-bike accidents were in the 18-44 and 45-64 age groups, the authors note. Ten-to-14-year-olds made up the largest group of those injured with powered scooters.

Males were more likely to be injured overall, accounting for 83.3% of e-bike injuries, 60% with powered scooters and 72.4% with pedal bicycles.

Powered scooter accidents were nearly three times more likely to result in concussions than e- bike injuries, and more likely to result in fractures.

But 17% of e-bike accident victims suffered internal injuries compared to about 7.5% for both powered scooters and pedal bikes.

Units in Operation

Growth has been so rapid that all data must be regarded as suspect. And the mini scooter business model has been (with or without local permits) to flood a city with scooters. This is thought to push competitors out or aside before they can get established, and that asking for forgiveness, hopefully with community support (“We like these!”) is easier than getting permits in advance. (This has highly variable results.)

Electric motor scooter operations are different. They require more capital, more planning, more support and they are fewer. Scoot Networks (Owned by Bird) is probably the only truly successful system so far. However, the concept is sound and others will follow. https://en.wikipedia.org/wiki/Scoot_Networks

YoY Growth in Rides

eCE has asked for this information from several contacts and companies and received refusals or no answer. We will continue to ask.

However, most of these share systems did not operate mini scooters two years ago. So growth is from 0 to whatever it is today. Growth in systems this year has been about 200% from January to January.

Coverage Area Map -cities that have scooters (percentage of citizens that have access to scooters

A map has been ordered. It will be pretty simple in it’s graphics.

The business model of these systems, plus the type of city that they favor means that nearly all citizens in the urban area has, at least potentially, access. Broken machines, lack of available machines at key times, affect this.

City Count – how many cities in USA have scooter systems

As of January 1, 2020, eCE believes that about 100 cities have a scooter share operation. These are concentrated in high population areas, with California being a leader.

What is growth potential?

eCE believes that this will be a short lived bubble for mini scooters. Injuries and local government push back will make these systems go away in the next 2-3 years.

eCE believes that the electric motor scooter system, using the same ideas and software as the electric mini scooter systems, will become one or two systems per major city.

Probably about 100 cities.

World Wide:

At least 125 cities in Europe have mini scooter systems, and about 30 have motor scooter systems. Some of these are several years old.

In China, SE Asia, the mini scooter systems are in nearly every city. Numbers not known.

Number of brands involved: More than 30 in USA. World wide, unknown, but probably more than 100 – see list below

Currently operating in North America (some share systems have presence in both USA and Canada)

Bird

https://www.bird.co https://en.wikipedia.org/wiki/Bird_(company) https://en.wikipedia.org/wiki/Scoot_Networks

Blue GoGo – Chinese share bike system, just China(?) https://en.wikipedia.org/wiki/Bluegogo

Hello Bike – Chinese share bike system

Shanghai Junzheng Network Technology Company

http://www.hellobike.com

Limebike (Neutron Holdings(

https://www.li.me/en-us/home

https://en.wikipedia.org/wiki/Lime_(transportation_company) Claims more than 100 cities.

Lyft Acquisition Motivate included: (Lyft, CitiBike, Nice Ride, Ford GoBike, Divvy, Bluebikes, Capital Bikeshare, BikeTown, CoGo, )

https://blog.lyft.com/posts/lyft-becomes-americas-largest-bikeshare-service https://www.motivateco.com https://en.wikipedia.org/wiki/Motivate_(company)

Republic Bike http://www.republicbike.com/bike_sharing.asp?

gclid=EAIaIQobChMI6oSupMC_5gIVQdyGCh1qGQJGEAAYASAAEgKGp_D_BwE

Mobike – Large Chinese share bike operator, with international locations https://mobike.com/us/

Ofo – Large Chinese share bike operator with international locations https://en.wikipedia.org/wiki/Ofo_(company)

On Bike Share – infrastructure provider https://onbikeshare.com/?

gclid=EAIaIQobChMI6oSupMC_5gIVQdyGCh1qGQJGEAMYASAAEgIyX_D_BwE

Koloni – infrastructure provider https://koloni.me/about NextBike https://www.nextbike.net/en/

Sharingos – Infrastructure provider

https://www.sharingos.com/? gclid=EAIaIQobChMI6oSupMC_5gIVQdyGCh1qGQJGEAMYAyAAEgIzT_D_BwE

Public Bike Share Company or PBSC Urban Solutions – Infrastructure provider and operator. Originated in Motreal, and is one of the older systems. Operating in at least 33 cities world wide.

http://pbsc.com/ https://en.m.wikipedia.org/wiki/PBSC_Urban_Solutions Spin – USA 62 cities

https://www.spin.app

UBER / Social Bicycle / JUMP https://www.jump.com

Trek Bicycle Company, B-Cycle https://www.bcycle.com https://en.wikipedia.org/wiki/BCycle

Scoot Networks (Bird)

https://scoot.co Skip Scooters https://rideskip.com

Smoove – Infrastructure Provider https://www.smoove-bike.com Zagster (City Ride) http://zagster.com

https://en.wikipedia.org/wiki/Zagster Deco Bike (Some controversy)

CycleHop (Mobi, Capital Bixi, )

http://cyclehop.com

8D – (Lyft)

https://www.lyft.com

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Part 5 Partnership Opportunities with small startups in Share Market

This is a separate attachment and will be sent on a separate email. See document titled: Partnership Opportunities in Micro Mobility USA BACK TO TOP

Part 6 Additional Questions

Top Ebike models in USA Market

The best selling by unit volumes are these:

Rad Power models Rad City @ $1499.00 and Rad Runner @ $1299.00

Most Rad Power bikes are similar and the focus is on reliable, low cost, high value bikes. The bulk of their sales, perhaps 40,000 units are these models.

Pedego Comfort Cruiser @ $1895.00 This is about 10,000 units in 2019.

Amazon Ancheer various models at $650.00

A qualified guess on unit volume is about 3,000 units.

Specialized Turbo Series starting at $3350 and The Turbo Leva being a popular eMTB. This is about 11,000 units.

The units that attract the most media and dealer attention are these:

Specialized Speed Pedelecs (Class 3) and Specialized eMTB. As usual, Specialized has done a great job of marketing them.

Specialized has superior design as well. So While the “hot” unit changes all the time Specialized is often in the top handful.

 

Battery Types and price at the OEM Level

Batteries for electric bikes have several routes to the consumer, a common starting point, and are often misunderstood.

The basic metallurgies that are viable must have enough energy per kilo and per liter to satisfy the consumers. Here are some parameters:

For most ebikes, weight of the battery is a major parameter. Weight is less important for commuters and lower priced bikes, but very important for eMTBs (where the rider must maneuver deftly, jump over obstacles, and endure shocks during descents.)

Of the major types of lithium metallurgy, the most common one used is Lithium Manganese with energy density in the 105 WH per KG to 120 WH per KG. With these, a battery can be constructed that gives the rider a commonly used design goal of “full speed for one hour”. Depending on the use, this can range from 360 WH to 650 WH, and using LiMo, this can be 3-6 Kg.

When using Lithium Iron Phosphate, with lower energy density, the battery is suitable for electric mini scooters of limited range, electric motor scooters that have more room and weight capacity for a battery and for some electric bike models. However, that lower energy per Kg, about 80 to 110 means a heavier and bulkier battery.

Seemingly attractive to ebikes, the Nickel Manganese Cobalt and Lithium Ion Cobalt metallurgies, with energy density ranging from 120 WH per Kg to 200 WH per Kg, have been regarded by ebike makers as risky, when used in the large format batteries of ebikes, and exposed to the harsh use typical of such.

Another important parameter is bulk or the volume of the battery. This is shaped by the design of the bike, with more and more emphasis on sleek designs, batteries inside frame tubes, etc.

A 2 liter / 360 wh (approximate) battery assembled from LiMo cells will fit in a frame tube. But the same amount of energy in Lithium Iron Phosphate will not.

Current USA regulations are detailed in Section 2 of this report. Demographics of ebike buyers

The links here will take you to some research done by Dr. Cherry and Professor MacArthur over the last decade. This is useful information, but limited due to small sample size, and rapid change in the market.

eCE describes the demographics of electric bike buyers in this way: Groups that buy electric bikes include:

  1. Transportation buyers that cannot afford or prefer to not use cars / motorcycles, with accompanying cost of parking, maintenance, insurance, etc. This group may be limited by income, or by philosophy, or by lack of documented citizenship status, or by a loss of a driving license due to conviction for Driving Under Influence. This group buys lower priced bikes, and looks for reliability and utility.
  2. Retirees that ride for recreation and exercise and are heavily influenced by their neighbors and peers. They buy comfort, familiar style, and while cost can be an issue, they have the means to buy whatever they choose.
  3. Mountain Bike Season of Life Extenders, usually baby boomers that want to keep riding in the conditions or with groups that they find physically challenging. An eMTB keeps the trails accessible. Cost is not an issue. But they are most comfortable with the major bicycle brands that they have always bought bikes from.
  4. Toy buyers, early adopters, that find new devices and vehicles interesting. Budget is not a problem, but they often will buy a cheaper model as an experiment, despite being able to afford any bike.
  5. Fitness riders. There is growing appreciation of ebikes for exercise. The electric bike is ridden more and more frequently. And by simply adding human effort, they become significant sources of exercise.
  6. Stay With the Pack Riders – this is another season of life extender, allowing the older rider to keep up with the pace of a club ride, or allowing a wife to ride comfortably with her spouse, or to equalize some other inequality of strength to improve enjoyment of the ride.

Several links below that are worthy of examination:

This is the abstract from Cherry and McArthur’s paper linked below:

“Electric bicycle (e-bike) use is a rising phenomenon in North America as a growing number of manufacturers produce a variety of bicycles which can accommodate the needs of diverse populations. With the growth of the e-bike industry, e-bike users are an increasingly integral part of both the transportation network and recreational trail system. However, little research has been conducted on e-bikes within North America, especially on the individuals who have purchased e-bikes. The first-known U.S. e-bike owner survey was conducted by Portland State University in 2013. The present study

seeks to strengthen our understanding of these issues, and to explore how the findings from the previous study may have changed over time and with the growth in the e-bike industry. Analysis of the survey results indicate that there has been little change in the primary reasons individuals are motivated to purchase an e-bike, and they tend to be related to various barriers which deter individuals from riding a standard bicycle; reducing physical exertion, challenging topography and replacing car trips continue to reign as a few of the most important reasons for buying an e-bike. The findings also reaffirm significant discrepancies in how these barriers are perceived by various subgroups of the population, as defined by the respondents’ age, gender and physical ability. Through analysis it became evident that e- bikes are making it possible for more people to ride a bicycle, many of whom are incapable of riding a standard bicycle or don’t feel safe doing so. Additionally, the electric assist of the e-bike helps to generate more trips, longer trips and different types of bicycle trips. These findings are represented by the high value attributed to being able to avoid or tackle hills easier, ride farther and faster with less effort, and being able to carry more cargo or children when needed.”

http://www.pedbikeinfo.com/trbped/documents/2018/ TRB%20ETLSV%20subcom%20Jan_9_2018%20MacArthur.pdf

https://cyclingindustry.news/electric-bike-experts-which-demographics-are-the- customers-of-the-future/

https://peopleforbikes.org/wp-content/uploads/2018/06/E-bikes-in-the-

Mainstream.pdf

Anex:

Explanation of process for tracking import numbers:

There is not an HTS code that is specific to electric bikes. Most are imported under 8711.9001, or 8711.6009, or occasionally other toy, bicycle, or motorcycle numbers. Some are imported under 8712.

8711 is a category that covers motorcycles, or any cycle fitted with a motor of any sort. .9001 and

.6009 are “other” sub categories, and for lack of a specific HTS code, these are the ‘most correct’ choices. But…many other vehicle related items can be imported under those codes, as well as some motorized toys, etc. So if we are searching for electric bikes, (or ebikes, or pedelecs, or electric assisted bicycles, or many other descriptions) we need to look more carefully. And each spreadsheet of import records results contains a lot of irrelevant info and “other” items that must be examined and removed.

And that more careful examination is tedious, and easy to miss significant units. So no one really likes to do it, and most people who explore this just search under description “electric bicycle” and then assume they have the whole story.

And some of the importers in the USA go to lengths to obscure their numbers by using logistics companies as the final destination, or other wiggles. (A common tactic in all competitive businesses in the USA….).

I have been doing this detective work for 25 years, and I have learned to search under about 60 different descriptions, plus known importers destination addresses, plus known large exporters (from Asia), plus cross referencing in several ways. I know that I do not get absolutely correct and complete information, but I find a LOT more units than outfits like Deloiitte, NPD, and Navigant. (And the parameters and search terms change, sometimes quickly.)

I have made errors, and will make more in the future no doubt, but the scale of the differences overcomes those errors. I believe that just as NPD results are useful, but limited, my results are useful, and have a broader view. But are less specific to the traditional bike biz.

If we look at the process used by NPD – relying on POS info from a group of retailers, which is then extrapolated… and we then consider that the largest USA ebike brand is a company that sells direct to the consumer and not through any retailer, we can instantly understand how NPD misses so much of the market. NPD has told me that they track Amazon, WalMart, and so on….but they do not seem to catch the volumes that arrive at Amazon distribution warehouses… so something is not working there. I strongly suspect that Deloitte and others either rely on what they find on the internet, or they do very rudimentary searches for the reasons I mention above. One run through the import numbers takes me about a month, and I think few (no) others are willing to put that much effort into it.

NPD numbers are useful to the traditional bicycle business, for they are gleaning info that relates directly to that channel. And NPD gets their money from that group, so they are correct to focus on it. But it is not correct to believe this is the entire picture.

Imports also catches the arrival of share bikes for UBER, LYFT, direct-from-factory-to- consumer, etc. While these are not retail units per se, they are part of the landscape that needs

to be considered.

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