Navigant Research Blog

Does Yamaha’s Entry into the US E-Bike Market Signal a Turning Point?

— October 3, 2017

Electric bicycles (e-bikes) continue to be the highest selling EVs on the planet. Navigant Research estimates that a total of nearly 35 million units will be sold globally in 2017. However, the US market has struggled mightily to keep up with its successful European and Asia Pacific counterparts.

Market Percentages

In 2016, just under 1% of total bicycle sales in the United States were attributed to e-bikes—compared to 15.7% in Germany and 24.2% in the Netherlands.

E-Bike Market Share of Total Bicycle Market by Country, Select Markets: 2016-2025

(Source: Navigant Research)

Navigant Research projects that e-bike market share will remain relatively low over the 10-year forecast period (below 4%) in the United States since the country has:

  • Lower gasoline prices compared to most other world regions
  • Poor bicycling infrastructure in many major cities, which are primarily designed for cars
  • Low consumer awareness and relatively high levels of opposition from independent bicycle distributors toward e-bike technology (compared to other world regions)

Turning Point?

In what may be a turning point for the US e-bike industry, Yamaha announced it will begin selling its branded e-bikes through US dealers in 2018. The company has been refining its production of e-bikes for decades, with over 2 million sales in Japan since 1993. The major new US market entrant boasts widespread brand awareness, an expansive dealer network with hundreds of locations in the United States, and large R&D budgets unavailable to most North American e-bike vendors.

Yamaha has shown four models thus far, including the UrbanRush, YDX-TORC, CrossCore, and CrossConnect—spanning racing, mountain, and street cruiser styles.

Impact on the Market

While Yamaha is somewhat late to the manufacturer e-bike party in the United States, the company’s entry is likely to present some challenges for other manufacturers and dealers. In the short term, Yamaha will primarily capture a portion of its sales—with some consumers opting for a trusted brand with hundreds of dealers that are available to market, sell, and service their e-bikes.

However, over the long term, Yamaha’s presence should help propel consumer awareness for e-bikes in the United States more broadly—which will be positive for all vendors left in the market. Similar to Elon Musk urging major automakers to sell more competitive EVs, a bigger e-bike market will increase overall revenue opportunities. Smaller companies would be wise to differentiate their e-bike products from Yamaha’s offerings to avoid losing market share to the more powerful marketing competitor.

 

How the IoT and Big Data Make Cities More Efficient

— September 8, 2017

The delivery of city services is being transformed by smart technologies that are providing city managers with new insights into operational performance and providing platforms for new forms of personalized and responsive services. Central to this transformation is the availability of real-time data from a growing range of intelligent devices that can monitor city operations. Sensors, communications networks, and the real-time data cities collect can enable more intelligent, efficient, sustainable, and interactive public services. The new technologies are helping cities make the most of limited budgets while adding additional value to the services provided to their communities. These innovations have the potential to drive a revolutionary change in the way city services are delivered in term of the quality, efficiency, and responsiveness of services.

Digital Technologies and City Services

Examples of how digital technologies are changing the way city services are provided can be found across a variety of key sectors:

  • Transportation: Real-time data collected from sensors and other devices can optimize connections between modes of transport for faster travel times, reduce the costs of operation, and increase convenience through improved information services for users on parking and transit availability in cities. Real-time data on traffic and transit services is providing new tools to city managers for both operation optimization and the delivery of new services to users. In Helsinki, for example, the bus service operator Helsingin Bussiliikenne Oy (HelB) worked with CGI to use improve its competitiveness through the use of sensors and data analytics on service performance.
  • Waste: Waste collection in cities is being transformed through the use of sensor technologies to improve collection. Companies like Enevo are providing real-time data and predictive analytics on the fullness of waste bins, enabling optimization of the collection process. These technological advances address the inefficiency of traditional waste collection, which is carried out by emptying containers according to predefined schedules and routes that are repeated at a set frequency.
  • Water: Droughts and population growth around the world have made water an increasingly important issue for cities. Intelligent devices, communications networks, and advanced IT systems are helping the water industry transform the way they deliver water services for cities. Veolia, for example, is working with the City of Lille, France to transform its water infrastructure. Working in partnership with the city, it deployed 1,000 sensors across the water network to identify leaks, as well as water meters and probes to test water quality.

Innovative Smart City Projects

The smart city market continues to expand, as city leaders across the globe are heralding innovative projects and laying out a vision for how cities can use technology to meet sustainability goals, boost local economies, and improve services. The importance of smart cities is being recognized at national level, as well. Canada is the most recent country to launch a national program, joining a list that includes Australia, the United States, China, India, Japan, Singapore, South Korea, and the United Kingdom. The Canadian federal government announced in early 2017 the launch of a Smart Cities Challenge Fund, proposing $300 million over 11 years for Infrastructure Canada to implement the program.

Intelligent Cities Summit

The myriad of ways in which this funding can utilize the power of big data and the Internet of Things (IoT) to deliver improved services in Canadian cities will be discussed at the upcoming Intelligent Cities Summit in Toronto (October 24-25). The conference speaker lineup features C-level municipal executives from cities such as Toronto, Vancouver, and Calgary, among others. See the conference website to download the brochure and register for the summit.

 

New OEM Products and Investment Boost Light EV Market

— August 1, 2017

Various light EV (LEV) technologies are emerging to address the congestion, poor air quality, and lack of mobility options negatively affecting transportation markets around the world. LEVs include low speed EVs—also referred to as neighborhood EVs—and electric-powered two-wheel vehicles such as electric motorcycles (e-motorcycles) and electric scooters (e-scooters). These vehicles offer the ability to improve personal mobility while simultaneously reducing pollution from the transportation sector, which are attributes desired by government authorities and citizens alike. In contrast to private cars, LEVs occupy less physical space, contributing less to traffic congestion and providing more flexibility in where they can travel and be parked. Additionally, these vehicles are generally more affordable and have lower capability requirements than full-sized EVs. Due to these advantages, electricity is more competitive with light vehicles compared to the full-sized vehicle market.

Significant OEM Announcements

Leading automotive OEMs, such as BMW and Mahindra, are recognizing the opportunities in the LEV market, and both companies made industry headlines in July. BMW Motorrad released its X2City e-scooter, designed for a variety of urban mobility applications. The kick e-scooter has a foldable steering unit (for easy storage) and a top speed of 25 km/h (15.5 mph) and an electric range of 25 km-35 km (15-22 miles). Rather than distributing the X2City through the BMW Motorrad dealer network, the e-scooter will be sold in bike shops and online by the end of 2017. It is expected to retail for about €2,500 ($2,950).

Indian conglomerate Mahindra Group announced that it will double its investment in the United States, adding another $1 billion in funding. The Mahindra GenZe e-bike and e-scooter brands are key to Mahindra’s North American strategy, which is disruptive to traditional transportation technologies. GenZe recently announced a partnership with the on-demand delivery company Postmates. It will be supplying LEVs in the company’s New York and San Francisco operations and will expand to supply more delivery vehicles to Postmates’ network of 200 cities over the next year.

Market Opportunities

Increasing urbanization and government policies are pushing consumers in heavily populated cities to move away from full-sized cars for motorized transportation, creating opportunities for LEVs. Navigant Research expects the market for LEVs to expand significantly over the next 10 years. According to Navigant Research’s Light Electric Vehicles report, revenue generated by global LEV unit sales is expected to more than double over the next 10 years—growing from a $9.3 billion market in 2017 to $23.9 billion by 2026.

The market will be driven by continued declines in technology costs, advances in technology capabilities, and positive national and local regulatory policies. Unlike other large EVs, the purchase price of LEVs in most markets is closer to their internal combustion engine equivalent. LEVs also have lower licensing and crash test requirements compared to other vehicles, easing adoption for businesses to produce them and for consumers to purchase them. While the market for LEVs is improving, several obstacles still need to be overcome. These obstacles include low retail gasoline prices, relatively high purchase costs, and technology limitations.

 

New Federal Government Support Will Accelerate Canada’s Growing Smart City Market

— June 16, 2017

Recently, the Canadian federal government announced it has pledged to launch a Smart Cities Challenge Fund, proposing $300 million over 11 years for Infrastructure Canada to implement the program. The funding will support the deployment of clean and digitally connected technology that can improve life in cities and is modeled similarly to the US Smart City Challenge (won by Columbus, Ohio).

Until recently, Canada has lacked a national smart city framework, leaving major cities such as Vancouver, Toronto, and Montreal to develop their own climate action plans and digital infrastructure projects without significant federal guidance or funding assistance. Over one-third of Canada’s population lives in these three cities, and over 80% of its overall population is urbanized, making the improvement of city service delivery a crucial issue in the country. Highlights of key smart city initiatives from these three cities include:

  • Vancouver: In March 2015, the City Council of Vancouver voted unanimously to develop and implement a 100% Renewable City Strategy by 2050. This aims to make the city emissions free in both the energy and transportation sectors.
  • Toronto: Canada’s largest city, Toronto (Greater Toronto Area population of 6.4 million), is targeting an 80% reduction in greenhouse gases by 2050 (compared to 1990 levels). The city has allocated nearly $100 million for energy conservation measures, renewable energy projects, and retrofits of city facilities. Toronto is also expected to be the site of Sidewalk Labs’ Digital City project, part of Google’s vision to reinvent cities from the Internet up.
  • Montreal: The Montreal Smart and Digital City Action Plan aims to position Montreal as one of the world’s smartest cities. The action plan introduces 70 projects divided into five focus areas: urban mobility, direct services to citizens, quality of life, democratic life, and economic development. This is an open data project with an ultra high speed, multiservice telecom infrastructure.

Federal Government Stepping Up with Funding

Three rounds of funding are expected to take place in Canada, with the first round set for fall 2017. Each round of Canada’s Smart Cities Challenge will include:

  • One $50 million prize in funding for a large city
  • Two $10 million prizes for midsize cities
  • One $5 million prize for a small community
  • One $5 million prize for an indigenous community

Prime Minister Trudeau has pledged to link infrastructure with an innovation agenda, and the Smart Cities Challenge will help Canada achieve that goal. Canada has evolved into one of the leading countries in the world in terms of building infrastructure through public-private partnerships (P3s), using this model to fund light rail lines, hospitals, jails, and water systems, among other infrastructure. The country’s high utilization of P3s for infrastructure development combined with the new funding available in the Smart Cities Challenge positions Canada to elevate its attractiveness to key suppliers in the smart city market. Its actions also potentially lift the country from its current follower position into a leadership role in global smart city development.

 

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