The electric two-wheel vehicle (E2WV) market in China has grown explosively in the past several years. A lot of this growth has come from the supply side, as the number of E2WV producers has reached anywhere from 2,700 to 3,000 companies While many of these manufacturers are building E2WVs from raw materials, numerous companies are manufacturing vehicles from completely knocked down (CKD) kits. A manufacturer builds the frame and components from raw materials and then these pieces are sent as a CKD kit to another factory, which assembles and rebrands the E2WV. (CKD kits are often sent across national borders by Chinese and other Asia Pacific and Western Hemisphere manufacturers, as well.) Other manufacturers are assembling E2WVs from components and frames sourced from a variety of suppliers.
E2WV growth in China is also being driven by relaxed regulations. In China, e-bicycles are defined as having pedals, a speed limit of 20 kph (12.4 mph), and a weight limit of 40 kg (88.2 lbs). Not subject to licensing rules, they’re significantly lower priced than scooters or motorcycles. The majority of the e-bicycles sold in China are scooter-style, meaning that they have step-through frames similar to traditional scooters, with almost useless pedals. Many of these scooter-style e-bicycles skirt the 40 kg weight limit. Additionally, the speed limits are met through speed limiters placed on vehicles capable of much higher speeds, and it is an open secret that many retailers will either disable these limiters or show customers how to do so. Enforcement of the rules has been lax at best – a situation that has begun to change as the number of E2WVs has grown.
The first stab by the government of China at cracking down on this industry in 2009 was met, not unexpectedly, without enthusiasm from both consumers and manufacturers. The new enforcement rules, which would have required e-bicycles to be licensed, were dropped before they went in effect. But in 2011, a crackdown on lead-acid battery producers resulted in the closure of a number of battery manufacturers that supply the E2WV market (approximately a quarter of all lead produced in China goes to E2WV batteries). The result was a shortage of batteries throughout the first half of 2012, limiting the growth of the E2WV market. What’s more, the government now requires E2WV manufacturers to obtain licenses, leading to consolidation in the market during 2011 and 2012. Cities and provinces have also tried cracking down on enforcement of e-bicycle rules, with limited success; some have decreed outright bans.
Additional regulation is inevitable. As I pointed out in Pike Research’s report, Electric Motorcycles and Scooters, the details of the new rules remain unclear, but one of two results is likely: e-scooters will be reclassified as e-bicycles because of a change in the definition (higher weight limits or speeds, etc.) or e-scooters will get a boost as e-bicycle manufacturers are forced to change their definition to meet market demand. Of course, the third option is that the government, faced with a backlash from consumers and manufacturers, will back down again – though this seems less likely than it was in 2009.
Annual Electric Scooter Sales, China: 2012-2018
(Source: Pike Research)
Tags: Clean Transportation, Electric Two-Wheel Vehicles, Electric Vehicles, Policy & Regulation, Smart Transportation Practice
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