JIVR’s look at the e-bike market going into 2019

E-bikes have quietly grown from a small niche into a big deal.

The last decade has seen a massive increase in the number of power-assisted bikes on city streets, bike lanes and everywhere in between. What used to be a curious sighting among two-wheeled travelers is now quite common. Advances in technology, congested urban environments and changing lifestyles, among other factors, have convinced millions to make the switch from conventional bikes while millions more have transitioned directly to e-bikes after leaving cars or public transport behind. E-bikes have rapidly grown from a niche into a firmly established part of the mainstream and are by far the fastest-growing segment of the entire bicycle market.

Here’s our overview of the global e-bike market as we head into 2019.

The numbers tell the story

Sales figures show just how big e-bikes have become. By the end of 2018, global sales will reach about 35 million units. About 90% of this will come from the Asia-Pacific region (APAC), with China in particular leading the way. Annual growth in the Chinese market is surprisingly modest, about five percent, and is comprised largely of entry-level models. A ban on e-bikes implemented in 2016 is still in effect in many of China’s largest cities and continuing conflicts over their legal and regulatory status are expected to curb sales until these issues are resolved. Still, the long-term prospects are still very good in a market of this size and growing prosperity.

In the European market, where overall bike sales have been flat for about twenty years, the e-bike segment has seen strong, consistent, year-on-year growth every year since 2007. Sales totals for e-bikes in Europe are approximately ten times greater today than they were eleven years ago. More than two million units will be sold in 2018 and the value of the market is estimated at €1.8bn.

There are a number of reasons to be optimistic about continued growth. Currently, just four countries account for 70% of European e-bike sales—Germany, Netherlands, Belgium, and France. As the challenges of urban congestion worsen, e-bike prices fall and features expand, sales are expected to increase at a brisk pace. Markets with significant biking populations, like Spain and Italy, are also rapidly approaching the tipping point of seeing e-bikes enter the mainstream. When you consider the emerging status of e-bikes in high-income markets like Sweden, Norway and the UK, it becomes clear that e-bikes are still very much in a high-growth stage and far from being considered a mature market.

The U.S. market, with its massive potential, is small but developing very quickly. For 2017, sales reached approximately 270,000 e-bikes, roughly 25% greater than the previous year’s total. One of the primary obstacles to sales of e-bikes in the United States has been the challenge of making them compliant with varied and often overlapping regulatory environments that govern their use. Most notably, New York City made e-bike use illegal only to reverse the ban a year later. Other state and local jurisdictions have sent similarly confusing signals, making large-scale distribution a challenge. Typically, issues like how e-bikes fit into existing laws governing helmet use, eligibility for bike lanes and licensing need to be clarified since most regulations were formulated before e-bikes were commonly used. There is still no unified, generally applicable set of rules for e-bike use in the U.S. but the current trend is good news for the industry and a sign that progress is being made towards a more consistent and predictable legal environment.

There is more encouraging news from the American market that justifies optimism for the growth of e-bikes there. The corporate world has recently sent a number of signals suggesting that interest in comfortable, efficient individual transport is set to rise dramatically. The largest move came in April of this year, when Uber acquired e-bike startup Jump for an estimated $200m. This is a major sign that big players in the mobility market believe that e-bikes have a role to play, particularly in urban environments.

Speaking of corporate players, many large employers in both the U.S. and Europe have begun to introduce programmes designed to encourage e-bike purchases through various subsidies and rebates. While this alone won’t dramatically push sales, it’s another sign of mainstream acceptance of e-bikes and a measure of the value of being a greener and healthier alternative to motor-driven transport.

A focus on product development

E-bikes are based on technology. It’s what puts the “e” in “e-bike” and the force behind their growing use.

One factor behind the rise of e-bikes is their easy integration with existing technologies like Bluetooth and GPS. These two platforms have provided ample space for manufacturers and developers to enhance the overall rider experience. The further application of developments in these and other technologies, like accelerometers, will continue to make e-bikes an attractive option for a consumer market with ever-higher expectations.

E-bike manufacturers have focused on implementing a range of technologies to add useful functionalities for riders. The process has been greatly facilitated by the deep market penetration of smartphones, which can act as a user interface and provide real-time information on things like speed, battery status and general bike performance.

The rise of the integrated tech aspect of e-bikes, including related factors like growing battery capacities and falling prices, has been and will continue to be a major factor behind e-bike sales. We expect the “smart” component of e-bikes to soon be standard in all but the least expensive models.

Trade wars hit e-bikes

In August of 2018, both the European Union and the United States imposed significant tariffs on e-bikes imported from China. The charge can range from about 21% to over 80% depending on the technical specifications involved. The move came as a response to what was seen as predatory “dumping” from Chinese manufacturers that were flooding American and European markets. E-bikes were one of a number of goods that were given protection from imported competition, a list that included such varied items as solar panels and steel. Regulators justified the measures as necessary to protect domestic manufactures, protect consumers and as a needed response to likely Chinese government financial support for the bike industry.

It’s too soon to say exactly what the effects on e-bikes will be but the implications of these tariffs are likely to distort the market in a number of ways. Given the massive production base of many e-bikes in Asia and the growing retail markets in Europe and North America, this is unlikely to be the last confrontation over trade practices in this industry.

JIVR is manufactured in the European Union and is therefore not affected by the new tariffs.

Who’s buying all these e-bikes?

Returning to the growth of e-bikes, let’s now focus on typical customer profiles and the demographics that have driven the rise in e-bike sales over the last decade.

When talking about tens of millions of customers, there is obviously a very long list of motivations behind all of those purchases. Still, in the case of e-bikes, it’s possible to group a very large portion of them into a few main categories. Here are some of the biggest groups of customers that are turning to e-bikes for their own reasons.

Urban Commuters

Getting around in cities has never been harder and it’s only getting worse. Traffic is a nightmare and public transport is stretched to its limit. Congestion fees, parking and other costs make cars an expensive luxury. Anyone who has to navigate a city centre, especially for work, has to choose from a list of unattractive transport options. Spending thousands of hours stuck in traffic has given millions of commuters plenty of time to think about alternatives to conventional ways of getting around.

These conditions have created a large and growing consumer segment that wants a convenient, comfortable and cost-effective way to literally get around traffic on their own schedule.

E-bikes are the ideal solution for anyone faced with the challenge of negotiating the clogged roads and transport networks of large European cities. Having an electric motor do much of the work means that using an e-bike isn’t nearly as demanding as conventional bikes. This means that e-bikers can dress for the office instead of bringing a change of clothes along for the ride.

Add to this the growing number of e-bikes that come with mobile apps that track things like distance covered and battery life while integrating with popular map applications and it’s easy to see why e-bikes are taking their place next to briefcases and laptop bags as standard equipment for urban professionals.

Typically, e-bikers in this group were not previous avid cyclists because traditional bikes demanded compromises they were not able to make. This particularly applies to the physical effort required to power a conventional bike and the conflict that presents when required to  dress for an office environment. By significantly lowering the bar in terms of the effort required, e-bikes suddenly become an attractive option.

Conventional bikers making the switch

Another large segment of the e-bike market consists of people who are already bike enthusiasts and choose to upgrade to the convenience of e-biking. Their particular motivations for going electric may vary but the one thing that binds them together is that, unlike the typical urban commuter already described, biking was already a part of their regular transport habits. Here are some of the more common reasons for switching from bike to e-bike:

• Many riders are instantly attracted to the ease of powering an e-bike versus the effort required from the bike they’ve been using. For this group, biking is already the way to get to work, move around town or spend leisure time. By upgrading to an e-bike, they’re getting a more comfortable and enjoyable experience without the physical demands of a conventional bike.
• Another sizeable group of existing cyclists is drawn to the e-bikes by something we’ll call the tech factor.  As mentioned earlier, e-bikes use various technologies to add a very modern twist to a familiar and classic mechanical device. Early adopter types and those fascinated by must-have gadgets are a natural fit for today’s e-bikes, many of which would not be out of place in a collection of cutting-edge tech products. As long as e-bikes feature the newest and most innovative tech-driven functionalities and applications, they will continue to attract those for whom biking is secondary to the experience of using something that turns heads.
• The same factor that makes e-riding attractive to the previous groups mentioned—the ease of riding resulting from electric motor-powered assistance—makes cycling accessible to another group of people who would otherwise not be able to ride due to various health issues. Adults with mobility issues form a segment that is remarkable not only for its surprising size but the certainty of its continued phenomenal growth. Being associated with an ageing population is not usually an asset for a brand or product category but it definitely is in the case of e-bikes. Demographic trends point towards a steady increase in the size of the age groups that are well represented among those with mobility issues. These same groups are also more likely to have the disposable income and willingness to spend on solutions that help to address health issues and ensure an active lifestyle. E-bikes are entering the mainstream at exactly the time when tens of millions seniors are looking for ways to maintain an active lifestyle in spite of various physical limitations.

Onward and upward

E-bikes have passed a kind of tipping point in their growth. Their sales figures are way up at time when the general bike market struggles to expand. Shifting market conditions have aligned perfectly with the USP’s of e-bikes and their ability to address the needs of markets as diverse as urban commuters looking to avoid traffic jams and seniors with mobility limitations. Inexpensive and easily accessible technological innovations have added a range of new functionalities and improved the rider experience. In short, e-bikes have taken a quantum leap forward at a time when more consumers than ever are searching for the kinds of solutions that only e-bikes can deliver.

If you haven’t already, take a look at our special brief on the changing profile of e-bike customers.