By Marc Sani
So much is happening at the moment within bicycle manufacturing and retail—worldwide—that it’s almost impossible to keep up-to-date, or for that matter, keep score on winners and losers.
After a multi-week drive through the western United States, I had the opportunity to talk with a variety of retailers and industry experts. And I learned a few things. As always, the West Coast tends to set national and sometimes worldwide trends. Here are some trends afoot which bear watching as the industry works its way through 2021 and prepares for 2022.
- There’s no question that e-bike sales are booming, particularly in Europe where sales are setting records. In the U.S. e-bikes are also coming into their own.
E-bikes are mostly sold to ride for pleasure not for commuting or hauling groceries, but this should come as no surprise to those who follow the U.S. market. Utility is out; fun is in. And kids are driving the market’s future. Sure, e-MTB’s are fun. But expensive, hard to find, particularly small and medium size models. More importantly, kids don’t care about traditional IBD brand names.
‘Those bikes are for old people’, which is a near fatal flaw in the industry’s marketing message that e-bikes keep aging riders riding longer. Of course that’s true, up to a point. But it’s not a message resonating with youth. Nor do they care about sporting e-MTB’s.
- Visit parts of Southern California for a few days and take note of the number of kids riding in packs—primarily ages 12 through 16—on e-bikes. And just as many girls as young boys. Think of the bikes they ride as freedom machines for those too young to drive. Most of them sans helmet.
The big winners: Rad Power and a host of other online brands most industry observers, like myself, have never previously heard of. Relatively inexpensive. Range isn’t an issue. Throttles are the rage. Most are bought online. While the industry quibbles ad nauseam over e-bike classifications and technical folderol, it’s the kids on low-end throttle-twisters who are setting the mark.
IBD brands? Forget it! Old fogeys ride those! Companies like Rad Power, Aventon, Propella, Super 73 and others could be the new Trek, Specialized or Giant a decade from now.
- I’ve just returned from a three week road trip. I couldn’t believe the number of young kids on ebikes. In Southern California, Rad Power bikes rule with the kids! I was sitting in a Southern California coffee shop and four teenage girls came in, probably aged around 12-14. Certainly under the driving age of 16. They all ordered their coffee’s then went outside and sat on their Rad Power bikes to drink them while they chatted. They all looked to be from affluent, white families. The fat wheeled e-bikes they’re riding cost around US$1,299 (A$1,732). They had them kitted out with baskets on the front.
This was one of many packs of kids I saw hanging out on e-bikes.
- Kids on e-bikes are also causing a host of local problems as they speed hither, thither and yon with little sense of the rules of the road. As an adult, it’s a tad scary to watch as they dart in and out of city traffic. A large electric bulletin board, that typically warns drivers they are speeding, was set up on a major street in the coastal city of Dana Point, flashing the following message: E-bike riders slow down.
Will these e-bike hot rodders force communities to impose more regulations on where e-bikes can be ridden and at what speed? I’m betting on, ‘Yes.’ However, making laws is easy; enforcing them is an entirely separate matter. There are now—and there will be more—conflicts between youthful e-riders and authorities. I suspect kids will carry the day.
- No discussion on the future of e-bikes would be complete without a brief foray into batteries. For top brands like Trek, Specialized, Giant, Cannondale and others, Chinese-made batteries are worrisome. If you want a corporate executive to lay awake at night, just mention the possibility of a $4,000 e-bike battery igniting like Chernobyl, burning down a house, and perhaps injuring its occupants. Think exploding scooters and hoverboards.
Quality is imperative. Liability issues are critical, which in the U.S. translates into who pays the bills. At the moment, most IBD brands use batteries sourced from South Korea and Japan with three companies—LG Chem, Panasonic and Samsung the leading suppliers. Supply and delivery is tight and this is a constraint on e-bike production and ultimately delivery. Building a battery factory is super expensive, as U.S. investors have discovered.
- Commodity prices for raw materials used in batteries is rising in line with demand. But the supply chain is complicated. Cobalt and lithium are minerals highly concentrated in a handful of countries. The Democratic Republic of Congo is a leader in cobalt production and China leads the globe in refining cobalt used in lithium-ion batteries. But Australia, Chile and Argentina are key suppliers of lithium with much of Australia’s shipped to China. Manganese comes from South Africa, China and Australia. Nonetheless, China does much of the refining of raw materials which it exports and uses in its own battery factories. China is the major player. So keep a sharp eye on global politics.
- And one final note to wrap this up. While Taiwan leads the world in manufacturing high value e-bikes, brands are strategic in where those bikes go.
At the moment it makes more sense to make and ship e-bikes for sale in Europe where demand is high and price less of a barrier than in the U.S. market. That simple fact has added to constraints on deliveries of high-end e-MTB’s to the U.S. And, for all practical purposes, e-MTB’s are the bike of choice for consumers spending US$3,000 (A$4,000) and up. Commuter e-bikes, depending upon location, can languish on the sales floor. And e-road bikes… well, really, who needs them?!