Navigant Research Blog

New Business Models and OEM Products Grow the Electric Power Two-Wheeler Market

— November 30, 2015

The electric power two-wheel vehicle (e-PTW) industry is expected to achieve stable and continuous growth during the coming years as new business models and several large OEMs permeate the market. According to Navigant Research, global annual sales of electric motorcycles (e-motorcycles) are expected to grow from 1.2 million vehicles in 2015 to 1.5 million in 2024, while sales of electric scooters (e-scooters) are expected to grow from 4.1 million to over 4.4 million.

Gogoro Brings Battery Swapping to Europe

In the e-scooter market, battery swapping startup Gogoro is transforming urban mobility by offering its e-scooter customers a battery swapping network, removing the range anxiety common to most types of electric vehicles (EVs). Gogoro has sold over 2,000 of its e-scooters over the past few months in Taiwan (using an infrastructure base of 90 GoStation battery swap stations), and the company has raised an additional $130 million in Series B funding from Panasonic (its battery supplier) and the National Development Fund of Taiwan.

Forbes reported that Gogoro will be expanding its program (which is currently only in Taipei, Taiwan) to Amsterdam in early 2016. As a city with narrow streets, a general lack of available parking, and a government looking for ways to reduce the number of four-wheel vehicles on the road, Amsterdam is a great fit for the electrification of two-wheelers. Aligning with Amsterdam’s smart city initiatives, Gogoro is aiming to become more of an energy company rather than solely an e-scooter manufacturer. The company’s GoStations are cloud-connected and are expected to coordinate with electricity grid demand in Amsterdam, charging batteries only at times when energy demand is low.

Gogoro is becoming a disruptive force in the industry, and the company has now raised over $180 million since being founded back in 2011. If the company’s business model can prove successful in Amsterdam, there’s no limit on the number of large European cities that could benefit from congestion-reducing e-PTWs.

OEMs Show New e-PTW models

Large OEMs are unveiling new e-PTW products that will serve an important role by increasing product availability in key markets. The sleeping giant in the industry, Honda Motors, plans to launch an electric scooter in 2017. This will be the first time Honda will sell an e-scooter to consumers, as its previous EV-neo e-scooter was a short-term project (2010-2013) that focused on leasing e-PTWs to fleets. Sales are expected to be concentrated in Japan, China, and other Asian countries where population density is creating congestion and air pollution problems. Meanwhile, BMW Motorrad unveiled a new e-motorcycle concept called the eRR. This high-performance motorbike is a further expansion into e-PTWs since BMW first released the C Evolution Maxi-Scooter back in 2014.


In China, E-Motorcycles Outrun Regulations

— March 11, 2013

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)


EV Case Studies Offer a Snapshot of a Developing Market

— June 9, 2012

Highlighting initiatives to promote EVs in 16 cities in the United States, Europe, and Asia, 14 of the world’s top economies have released an EV City Casebook.  The casebook, produced by the Electric Vehicles Initiative (EVI), one of 11 clean energy initiatives sponsored by the Clean Energy Ministerial, is meant to serve as an example for other cities or regions that want to promote electric vehicle deployment.  The Clean Energy Ministerial is just what it sounds like: a formal gathering of very high level government officials, who are cooperating on the drive to clean energy.  The participating countries account for 80% of global greenhouse gas emissions and 90% of global clean energy investment.

The Casebook highlights efforts to promote EV uptake in 16 sites around the world.  After I had a quick read through of the case book, a few thoughts came to my mind:

  • Overall, the EVI has set fairly ambitious deployment targets.  The EVI has set a goal of 20 million EVs on the road worldwide by 2020.  This is actually a bit less ambitious than the International Energy Agency (IEA) goal of 27 million.  But both are higher than Pike Research reckons we’ll be seeing by then.  As long as these are not trumpeted too loudly as the sole measure of success for EVs, this is not necessarily a bad thing.  But as we’ve discussed already in several blog posts, the fact that PEVs did not hit the rather lofty first-year sales targets that the automakers set, gave the impression of a market falling short, when in fact, the first year sales outpaced the first year of hybrid vehicle sales.  So targets are a tricky business.  A good example of how to set a target and meet it is the Kanagawa Prefecture in Japan.  Based on sales of hybrid vehicles, which reached 3,000 within five years of being introduced, Kanagawa set a target of 3,000 EVs by 2013, and 2,100 EVs were in use as of the end of 2011.
  • It’s not just about cars.  Cities are looking to spur deployment of passenger cars, yes, but also buses, two-wheel vehicles, neighborhood electric vehicles (NEVs), and various work or utility vehicles.  For example, BrabantStad in the Netherlands aims to have a zero emission public transit fleet by 2020 – perhaps another aggressive goal.  Pike Research has been marking the booming market for electric two-wheelers, projecting that 382 million will be sold in Asia Pacific alone through 2018.  The Case Studies on Shanghai reports that there are around 130 million electric bicycles in China.
  • Fleets and car sharing will play a key role in early EV adoption.  We’re hearing lots of stories about cities promoting car sharing programs that use EVs, like Car2go, Daimler’s car sharing program that uses both the gas and electric versions of the Smart fortwo.  According to the U.K. case study, the two main EV dealerships in North East England indicate that 85% of EVs sold in the region have been purchased by businesses as fleet and pool cars.

The Case Study report also highlights the range of incentives and subsidies available for electrified vehicles.  In all, the report is an interesting look at a market in development.  Some cities have moved quickly to adopt EVs and charging equipment, others are still in early trial stages.  The case studies make clear the need to set appropriate expectations for market development and for a range of private and public stakeholders to pitch in during these early days.


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