Navigant Research Blog

Manufacturers Race to Bring E-Bike Wheels to Market

— December 21, 2014

With the cost of fully electric bicycles still relatively high (on average $1,500-$2,500) in the United States, several manufacturers are looking to offer innovative new products at a lower price in order to attract consumers.  One example is all-in-one e-bike retrofit wheels.  For $1,000, you can pre-order the EVELO Omni Wheel (targeted shipping date of March 2015), which replaces the front wheel of a traditional bicycle to convert it into an e-bike.

With a maximum range of 25 miles, EVELO’s product contains a 350W motor and has a top speed of up to 20 mph.  Similar products are available, though shipping dates vary slightly: the FlyKly Smart Wheel (estimated shipping time of 3 months) and the Copenhagen Wheel from Superpedestrian (expected ship date is spring 2015).  At a cost of $1,099, the FlyKly is the least powerful of the three products, with a 250W motor and top speed of 16 mph.  Developed at MIT, Superpedestrian’s Copenhagen Wheel is more comparable with the EVELO product, as it has the same motor power (350W) and top speed (20 mph), while coming in at a slightly lower price point than its competitors ($949).   

Both the FlyKly and the Copenhagen replace the rear wheel of traditional bicycles, while EVELO’s retrofit kit replaces the front wheel.  Generally, consumers prefer the rear hub placement, as it’s the most natural location to provide thrusting power.  While all three products are likely to be delivered in a similar timeframe, FlyKly has been the first to market, with the other two competitors following closely behind.

Going Electric

The influx of new product offerings is a good sign for the U.S. e-bike market, as manufacturers are seeing strong interest from consumers.  In fact, FlyKly has more than quadrupled its initial Kickstarter goal ($100,000 in funding) for its Smart Wheel product.  The increased availability and affordability of product offerings, combined with urbanization and an aging population, is driving the growing acceptance of e-bikes as a means of personal transport, particularly in Western Europe and North America.

With three competitive all-in-one e-bike replacement wheels set to be available in 2015, it could be a big year for e-bike retrofit kit sales.  For more information on e-bikes, see Navigant Research’s report, Electric Bicycles.  Global annual sales of e-bikes are expected to exceed 40 million units a year by 2023, according to the report.

 

Plummeting Gas Prices Raise Another Hurdle to Meeting CAFE Standards

— December 1, 2014

National average gasoline prices have continued to slide in the United States, down more than 10% from the same time last year.  This marks the first time in nearly 4 years that a gallon of gas has been so cheap.  While undoubtedly great news for the average consumer, who could be saving $10 to $20 per trip to the gas station, the same cannot be said for the hybrid and electric vehicle (EV) industry ‑ and, perhaps surprisingly, the auto industry at large.

Automakers in the United States are being pressed to meet increasingly stringent fuel economy requirements, organized under Corporate Average Fuel Economy (CAFE) standards.  CAFE requires new passenger cars, light duty trucks, and medium duty passenger vehicles to meet an estimated combined average fuel economy of 34.1 mpg in model year 2016 and 54.5 mpg by 2025 (compared to the 24.8 mpg new-car average fuel economy in 2013).  In order to meet these requirements, automakers will need to sell significant amounts of plug-in electric vehicles (PEVs) and hybrid electric vehicles (HEVs).  However, a drop in the price of gasoline will surely affect the sale of all types of EVs, as the connection between gas prices and EV sales is well-documented.

How Long Can They Last?

Lower gas prices simply reduce one of the main advantages of electric cars: operating costs.  If consumers aren’t saving enough money by charging their vehicle with electricity versus fueling with gas, significantly fewer consumers will be willing to deal with the extra upfront costs and charging requirements of EVs.

Horizontal drilling and hydraulic fracturing have largely been given credit for decreasing gasoline prices in the United States.  These new techniques, as controversial as they are, have transformed the country into the world’s leading petroleum producerAccording to the U.S. Energy Information Administration (EIA), America’s domestic oil production grew from 5.6 million barrels per day (bbl/d) in 2011 to 7.4 million bbl/d in 2013 and is forecast to reach 9.5 million bbl/d in 2015.  These signs point indicate that low gas prices could persist, barring any major disasters in the Middle East.

Possible Rollbacks

The U.S. government is poised to review the CAFE standards in 2017.  If gas prices stay below $3 a gallon over the next few years, regulators may have to consider either rolling back the CAFE requirements or giving the automakers more time to reach them.  The same logic holds true for the zero emissions vehicle (ZEV) states.  Eight states have signed on to introduce at least 3.3 million plug-in vehicles and hydrogen fuel cell EVs to their collective roads by 2025.  Forcing automakers to sell a specific quantity of ZEVs will become even more difficult if consumers see the economic advantages of ZEV operating costs quickly diminishing.  Ultimately, if long-term crude prices remain below $80 per barrel, regulators will be forced to become more innovative in their strategies to decarbonize the transportation sector.  Meeting emissions objectives may need to include mandates to address the fuel itself through the addition of more biofuels or refining gasoline and diesel fuels to be more efficient.

 

Car-Free in Colorado: Living with an E-Bike

— October 20, 2014

After years of vehicle ownership, I decided about 3 months ago it was time for a change of pace.  Literally.  Tired of the plethora of (and seemingly continually rising) costs associated with owning a vehicle (parking, maintenance, insurance, repairs, registration fees, gasoline, etc.), I sold my car and used part of the funds to purchase an E3 Vibe electric bicycle (e-bike)  for $1,500 from Currie Technologies.  An e-bike is a traditional pedal bicycle with a battery pack that stores electricity, an electric motor for propulsion, and a user control attached to the handle bars for modifying the level of electrical assistance.

(Source: Currie Technologies)

Living in Boulder, Colorado certainly makes this transition much easier than in most U.S. cities.  An excellent bicycling infrastructure, a local carshare program, and comprehensive transit system all contribute to an excellent environment for going car-less.

Cost Analysis

With an upfront cost of $1,500, the e-bike will pay for itself after one year of avoided car insurance and gasoline expenses.  My monthly gasoline and insurance charges were about $130 combined ($80 for insurance, $50 for gas), totaling $1,560 per year.  This is more than the brand new e-bike cost itself, without even delving into the additional avoided costs of vehicle registration fees, parking, maintenance, and repairs.  Just as an example of potential additional costs of owning a vehicle, it’s estimated that in Colorado, the average cost of a common car repair (parts & labor) was $348.17 in 2011.

What about the operating costs for e-bikes? While many organizations estimate the cost of fully charging an e-bike from $0.10 to $0.20, other conservative estimates project that it costs just under $0.25 to charge an average e-bike battery from empty to full.  For me, this would happen about twice a week, since I’m usually charging the battery from half to full power 4 times per week (a 6.3 mile commute round trip usually drains the battery to a little over half power).  Using the conservative estimate of $0.25 to fully recharge the battery, electricity for recharging my e-bike would run about $26 per year ($0.50 multiplied by 52 weeks).  This (wishfully) assumes no winter in Colorado.  With a more realistic projection of biking to work three-quarters of the year, this reduces the annual charging cost to under $20.

Electric Hum

When the weather isn’t suitable for biking to work, I take the bus with a complimentary bus pass from my employer.  However, since I do need access to a vehicle on occasion, I have become a member of Boulder’s carsharing program, eGo CarShare.  So far, I am averaging about $20/month in rental fees, amounting to $240 per year.

Overall, becoming an e-bike owner has not only provided significant financial relief, but has also been an incredibly enjoyable experience.  I bike more often and travel longer distances than I would typically go on a traditional bike.  In addition, I get to confuse other cyclists with the humming sound of a 250W electric motor.

 

Autonomous Vehicles Coming Sooner Than Predicted

— October 14, 2014

Recent developments in the automotive industry indicate that semi-autonomous vehicles may be coming to market sooner than previously expected.  In early September, General Motors announced that it will introduce a 2017 Cadillac model equipped with advanced driver assist technology – allowing drivers to travel at highway speeds without touching the steering wheel or pedals.  Elon Musk, CEO of Tesla Motors, stated that the company plans to introduce self-driving technology in the next 3 years with the new Model 3 electric sedan (due for release in 2017).  Musk also gave some longer-term forecasts: “Full auto-pilot capability is going to happen, probably, in the 5- or 6-year time frame.”  Additionally, Audi became the first company to receive the newly established autonomous driving permit, issued by the state of California.  As discussed in earlier blogs by my colleague David Alexander, the United Kingdom, China, and South Korean company Hyundai have also been active in the autonomous vehicle space.

New Market Entrants

Israel-based technology company Mobileye has recently received considerable media attention and market interest for its advanced driver assistance technology.  The company went public on August 6, 2014 at $25.00 per share.  Since the IPO, Mobileye’s share price has more than doubled to $51.23 as of September 24.  The company’s products are integrated into vehicle models from global automakers, including BMW, Ford, General Motors, Honda, Nissan, and Volvo.  Mobileye also works with several Tier One suppliers, including Autoliv, Delphi, Continental, Magna Electronics, and TRW Automotive.

Too Big to Ignore

Growing interest in autonomous vehicles can be attributed to the fact that the benefits of the technology are simply too large and far-reaching for policymakers, investors, and analysts to ignore.  In the United States alone, 33,561 people died and about 2.36 million people were injured as a result of traffic accidents in 2012, according to the National Highway Traffic Safety Administration.  The majority of all auto accidents (75% to 90%) are caused by driver error, distraction, or impairment.  In theory, fully autonomous vehicle traffic would prevent nearly all of these driver-related accidents.  Self-driving vehicle technology also has the potential to drastically reduce CO2 emissions, traffic congestion, and the stress of driving.

Navigant Research expects the global market for fully autonomous vehicles to average about 4.6% of new vehicle sales in 2025, rising to 40% in 2030 and reaching nearly 75% by 2035.

 

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