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.

 

Purchase Incentives More Cost-Effective for E-Bikes Than EVs

— March 24, 2017

Electric bicycles (e-bikes) continue to be the highest selling EV on the planet, with nearly 35 million unit sales forecast for 2017. Increasing urbanization and a desire from consumers and city officials to move away from cars for motorized transportation are opening opportunities for alternative mobility devices. E-bikes are uniquely positioned to be a primary benefactor of this trend since they are low in cost relative to cars, do not require licensing, have no emissions, and can take advantage of existing bicycling infrastructure. The European Cyclists’ Federation (ECF) published a report that shows e-bikes are a particularly cost-effective way to decarbonize the transport system through incentives. However, e-bikes have received little in the way of purchase incentives within most countries’ electric mobility strategies.

Germany has spent an enormous sum of money on electric cars, with unimpressive results. The country spent €1.4 billion ($1.5 billion) through 2014 on R&D and added an additional nearly €1 billion ($1.07 billion) subsidy scheme in 2016. Yet, there are just 25,500 pure EVs on the road in Germany. Meanwhile, e-bike sales exploded in the country during the same period with virtually no subsidies, aside from a few small pilot projects. Over 2.5 million e-bikes are in use in Germany, and Navigant Research expects nearly 650,000 unit sales for 2017. One wonders how much higher this figure could be if e-bikes had the same public financial support as EVs in Germany.

Differences in E-Bike and EV Policy, Germany: 2016

(Source: European Cyclists’ Federation)

New E-Bike Purchase Incentives in Europe

Several new e-bike purchase incentives have popped up across Europe, providing a boost to the industry and demonstrating new confidence in e-bikes as a cost-effective way to reduce traffic congestion and greenhouse gas (GHG) emissions. France announced a $200 subsidy for e-bike purchases in February 2017, and earlier in the year, Oslo, Norway began a $1,200 incentive program for electric cargo (e-cargo) bikes. Austria has offered an e-bike incentive program for numerous years. The ECF estimates roughly 25% of early e-bike purchases in the country’s crucial market uptake phase, around 2010-2011, were supported by financial incentives. Austria has one of the highest sales rates of e-bikes per capita in Europe, third behind the Netherlands and Belgium.

The increasing number of e-bike incentives in Europe demonstrates the growing recognition by European policymakers that e-bikes can be a more cost-effective technology to incentivize over EVs within an electric mobility strategy. On average, e-bikes cost less than 8% of the price of an electric car, according to the ECF. This, coupled with the lack of licensing requirements, make adoption much easier for consumers.

Studies Show

As noted in a previous blog, a consumer survey conducted by the Oregon Transportation Research and Education Consortium (OTREC) showed that the primary reason respondents bought e-bikes was to replace car trips—not bicycle trips. E-bikes offer enormous potential to replace cars. One study by the German Federal Environmental Agency shows that e-bikes are faster than cars for distances of up to 10 km (6.2 miles) in an urban environment. The trends in Europe in conjunction with conclusions from these studies suggest that more countries should incentivize and promote e-bikes if the goal is to reduce GHG emissions and traffic congestion in a cost-effective way.

 

New E-Bike with Unlimited Electric Range Shakes Up EV Industry as a Whole

— October 26, 2016

Electric range is a key factor for consumers when determining whether an EV can satisfy their transportation needs. In the car industry, perhaps the most significant development within the plug-in EV space is the imminent availability of 200-mile range EVs offered at reasonable prices ($35,000 to $40,000). In the power two-wheeler (PTW) market, similar electric range capabilities are now being offered by electric motorcycle manufacturers such as Zero Motorcycles.

Similar, But Different

For electric bicycles (e-bikes), range has not been as much of an issue compared to other EVs since e-bikes can be pedaled and are thus still operational even with a fully drained battery. However, range anxiety is still a significant concern for some riders since e-bikes are generally much heavier than traditional bicycles, making them undesirable to ride without electric assistance. The recently released VELLO BIKE+ is a self-charging electric folding bike that can be fully recharged while riding through an integrated kinetic energy recovery system (KERS). When in this self-charging mode, energy is collected through braking and pedaling downhill as mechanical energy is converted into electrical energy via the KERS.

The VELLO BIKE+ also appears to be the lightest e-bike on the market, weighing just 26 lbs., which also helps the e-bike use electricity more efficiently than heavier models. While the power of electric assistance under the self-charging mode is likely to be somewhat minimal in order to provide unlimited range, the low weight of the e-bike makes the VELLO BIKE+ practical for this application. Having such a low weight allows the e-bike to be easily pedaled under low levels of power electric assistance and reportedly manageable to pedal with no electric assistance at all. The Vienna, Austria-based company VELLO has raised over $230,000 on Kickstarter for the BIKE+.

Beyond E-Bikes

Creating an e-bike with unlimited range is a profound development for not only the e-bike industry, but also for the EV industry at large. E-bikes have now demonstrated that it is indeed possible to eliminate range anxiety, and new initiatives in the automotive industry offer the potential to do the same for EVs—such as the UK testing of roads that wirelessly charge EVs as they drive. At a time when an increasing number of jurisdictions are planning to ban internal combustion engine vehicles, electric range capabilities will become a crucial factor in the adoption of electric transportation of all kinds—whether on two wheels or four.

 

Renewed U.S. Tax Credit Gives E-Motorcycle Market a Boost

— December 29, 2015

An important federal tax credit for electric motorcycles (e-motorcycles) expired at the end of 2013, but has just been reinstated as part of the enormous $1.1 trillion spending package approved by Congress in December 2015. The federal tax credit will offset 10% of the purchase price for qualifying plug-in two- and three-wheel vehicles (must have a top speed of at least 45 mph and a 4 kWh battery or larger). The maximum credit available to consumers will be $2,500 and the credit will apply retroactively to all e-motorcycle purchases since January 1, 2015.

This effort, reportedly spearheaded by California-based manufacturer Zero Motorcycles and non-profit Plug In America, will likely serve as a sales boost for the e-motorcycle industry in the United States. However, e-scooters and e-bikes do not receive the same tax advantages since these technologies generally have a top speed limit of 30 mph and 20 mph, respectively. So why are lower speed electric vehicles (EVs) left out of the incentive regime?

Highway-Capable and Gas-Powered Vehicle Replacement

Part of the reason is likely due to the fact that only on-road or highway-capable vehicles are considered to be worthy of tax credits, based on the larger volume of emissions being avoided from these vehicles. Another explanation specific to e-bikes may be that the technology is seen as replacing bicycles (already a clean technology), not cars. However, this assumption may not be entirely accurate.

A consumer survey conducted by the Oregon Transportation Research and Education Consortium (OTREC) demonstrates that the primary reason respondents bought e-bikes was to replace some car trips (see Figure 1 below). Additionally, the main reason cited by respondents for using an e-bike was to commute to work or school (see Figure 2). The survey from OTREC suggests that e-bikes are used for commuting and to replace car trips much more than lawmakers think or even recognize. Speaking from personal experience, my e-bike replaced both my traditional bicycle and my gasoline-powered car—with the primary purpose of using the e-bike as a commuting vehicle.

While the tax credits are welcome news for the e-motorcycle industry, e-scooters and e-bikes continue to be under-incentivized and under-utilized technologies in the United States. If the primary goal of tax credits for all EVs is to replace or reduce the number of gas-powered vehicle trips, then e-scooters and e-bikes should be considered in the future.

Figure 1: OTREC Survey Respondents’ Primary Reason for Purchasing an E-Bike

Ryan Blog Fig 1

(Source: Oregon Transportation Research and Education Consortium)

Figure 2: OTREC Survey Respondents’ Main Purpose for E-Bike Trips

Ryan Blog Fig 2

(Source: Oregon Transportation Research and Education Consortium)

 

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