No engine, no problem: E-bike market charges up

Electric bicycles have for years been a common sight in some regions of the United States. In New York City, delivery drivers zip through traffic in the boroughs and commuters on rented Citi Bikes as they cruise the city’s bike lanes on their way to and from work. Nearly 3,000 miles away, electric Lyft bicycles with pedal assist are plentiful along the California beachfront, sharing walking paths with outdoor enthusiasts and beachgoers. Today, these e-bikes are finding their way into powersports dealers’ showrooms , where they represent one of the fastest growing product categories in the powersports industry, poised to act as a bridge to bring younger riders to the powersports market following the pandemic-spurred surge in new riders, National Powersports Auctions (NPA) Chief Executive Jim Woodruff told Auto Finance News at AIMExpo last month in Las Vegas. “E-bikes are here to stay in some form,” Woodruff said. “I love the idea of a bridge, so to speak, from a traditional bicycle to a motorcycle. There are so many … different types of e-bikes out there right now that all that product spectrum between bicycle and motorcycle is going to be filling in [in] the coming years. I think all that will lead to future motorcycle riders.” E-bikes fall under three classifications, according to multiple state regulations, including California. Class I e-bikes offer pedal assist — much like Citi Bikes in New York and Lyft bicycles in California; Class II e-bikes offer throttle assistance up to 20 mph; and Class III bikes have throttle assistance up to 28 mph. Ramping sales The global e-bike market — led by the Asia-Pacific region and growth in the European market — was estimated to be $26.7 billion in 2021, with a compound annual growth rate (CAGR) of 12.3%, according to a Feb. 14 report from Statista . By 2027, the global market is expected to more than double to $53.5 billion. In the U.S., the e-bike market in 2021 grew 20.8% YoY to $899.6 million, led by Class I e-bikes, according to Grand View Research . CAGR from 2022 to 2030 for the U.S. market is estimated at 22.6% [caption id="attachment_57335952" align="aligncenter" width="670"] Courtesy of Grand View Research [/caption] Fort Worth, Texas-based Zooz Bikes , which manufactures three e-bike models that retail for roughly $3,000, is shipping bikes to places it “never imagined selling to,” founder and Chief Executive Chris Zahner told AFN. “We’re primarily direct-to-consumer, so we see exactly where [the bikes] are going,” Zahner said. “New York City and Southern California are absorbing the most of our products, but we have people that are buying them in places we never imagined selling to, like the northern tip of Iowa, Arkansas, [and] Sioux Falls, [S.D.].” Zooz offers point-of-sale financing through Klarna and Affirm, and leverages relationships with dealers to increase its brand visibility, Zahner said. The company works with 48 dealers in the continental U.S. and Hawaii, according to the website. “In our business model, 20% of our volume goes through partnered retailers to provide a lift to the brand and presence on the ground floor in the locations we want to be at,” Zahner said. He did not specify sales volumes. [caption id="attachment_57335957" align="aligncenter" width="1024"] Courtesy of Zooz Bikes [/caption] Meanwhile, e-bike manufacturer QuietKat is also exploring potential financing options as sales ramp, National Sales Manager for Outdoor Recreation Andi Malbeouf told AFN. Financing “is where we’re going right now — obviously that’s the world we live in with higher prices,” Malbeouf said. “The Lynx [model] is around $4,000, and the Rubicon [model] is maybe $6,200. We certainly want to be able to give dealers and then ultimately the customers more opportunity to be able to afford the bikes, so we’re working on all those solutions.” QuietKat has a “healthy mix” of sales channels, including a direct-to-consumer channel, mass market retailers such as Bass Pro Shop, Lowes, and Shields, an independent dealership base,” Malbeouf said. Consumers can take out point-of-sale financing through Affirm, according to the company's website. Yamaha Motor Co. , too, saw retail sales of electric pedal-assist bicycles double last year, Sales and Marketing Manager Drew Engelmann told AFN at AIMExpo, but declined to mention specifics. Engelmann heads up the OEM’s electric pedal-assist bicycle product line. “Our No. 1 goal last year was to become a more valuable retail partner, and in the ridership side of things, we wanted to grow our own community and help establish it out for future years, and that’s still a process today,” Engelmann said. Yamaha has made more than 4 million e-bikes since launching the product in 1993 in Japan, Engelmann said. The OEM sells 10 different on- and off-road e-bike models, ranging from $2,400 to $5,400. [caption id="attachment_57335953" align="aligncenter" width="1024"] Courtesy of Yamaha Motor Co. [/caption] Increasing powersports accessibility E-bikes represent significant potential to increase consumer accessibility to the powersports industry, NPA’s Woodruff said. “The nice thing about e-bikes is they are accessible,” Woodruff said. “You don’t need a special license to ride off road, [and] the training and safety gear is a different hurdle [than for motorcycles]. E-bikes and other forms of vehicles that are easier to ride and safer — that’s going to lower a lot of the barriers that people may have had in the past to actually jumping on board.” E-bikes point to a convergence of leisure and utility, Yamaha’s Engelmann said. “Our bikes are more in the performance-oriented category; [they are for] someone that wants to use the bike for exercise but also [with] the benefit of [pedal]-assist. Someone that rides with friends that ride as well — they all want to have that same kind of ride experience,” he said, noting Yamaha’s e-bikes are also geared toward riders that may want to race their bikes. Zooz Bikes, too, emphasizes the “usability” of its bikes, even as the brand focuses its marketing on the “fun” aspect of owning one, Zahner said, noting that many of the company’s customers use e-bikes to commute to work. “We’ve seen the whole gamut with our bike, and it validates [utilitarian] categories,” Zaher said. “We stick to fun. Utility, I think, is a big broad stroke. What’s more appropriate — and even maybe more casual — is usability. I can use this when I’m going riding with the family and we’re having a fun excursion. Or I can use this to run down to the post office or the coffee shop.” In fact, many e-bike companies have in common the mission of bringing people together, mirroring the tenets of the close-knit powersports community. “When you look around [AIMExpo] and you see e-bikes everywhere, I think bringing people together is the basis of it,” QuietKat’s Malbeouf said. “Whether its off-roading 10 miles out with all your gear aggressively or just around town getting some fresh air, I think it’s really important that people get into e-bikes in that way.” [caption id="attachment_57335958" align="aligncenter" width="1024"] Courtesy of QuietKat [/caption] Approaching market saturation? While there is little centralized information as to how many e-bike brands are in market, e-bike information website Electric Wheelers estimates there are nearly 500 e-bike brands in market as of September 2022, according to company research. Powersports executives agree that market saturation coupled with competition is already reducing the size of the playing field. “The U.S. market is a very challenging market for brands to start,” Yamaha’s Engelmann said. “When we started in 2018, we had a list of brands we felt were in the competitive landscape, and I would say maybe one-third of them are still here.” Value proposition, as always, will likely set the competition apart. “The market is growing at an exceptional rate and will continue to do so,” Zooz’s Zahner said. “But I think the people that have good brand position, good products, good customer service and good coverage in their areas where they can really market and move their products, those are the people that are going to grow. “I think that the people that are fighting for the consumer’s bottom dollar are going to shake out an accelerated rate through 2023 and 2024,” he added. --Additional reporting by Johnnie Martinez II Auto Finance Summit East, Auto Finance News’ new spring event, is set for May 10-12 at the JW Marriott Nashville featuring a fireside chat with Peter Muriungi, CEO of Chase Auto. Visit autofinance.live.

No engine, no problem: E-bike market charges up

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