E-Bike Market

The global market for electric bicycles (e-bikes) is projected to experience significant growth in the coming years. By 2030, the market is estimated to reach a value of USD 77.2 billion, with an expected valuation of USD 51.5 billion by 2023. This growth is attributed to a compound annual growth rate (CAGR) of 8.4% between 2023 and 2030. The increasing demand for e-bikes worldwide can be attributed to their environmentally friendly nature, which aligns with the growing concern for eco-friendly commuting options. Rising fuel prices have further supported this inclination towards e-bikes. Governments in various cities globally have also taken initiatives to develop dedicated bicycle lanes to encourage the use of e-bikes.

Market Dynamics:

DRIVER: Government support to increase e-bike sales to lower CO2 emissions

E-bikes offer a low-emission mode of transportation with several advantages, including improved health, reduced travel time, cost savings, enhanced safety, alleviated congestion, decreased air and noise pollution, and increased energy security. For short distances, e-bikes prove to be a more efficient alternative to other means of transportation. Riders of e-bikes can save money and contribute to reducing environmental impact. However, the production of e-bike components such as batteries and drives does contribute to emissions. In everyday life, e-bikes can replace cars in various situations, such as shopping with a cargo bike. The energy consumption of an e-bike is significantly low, requiring approximately 11.2 Wh of electricity per mile traveled. In comparison, cars emit around 240 g CO2 per passenger mile (pkm), while public transportation emits between 80 and 176 g CO2 per passenger mile. Bicycles and e-bikes have substantially lower emissions compared to other transportation modes. In order to meet carbon emission targets and promote cycling, governments worldwide are implementing different incentives and rebate programs. Countries like The Netherlands, Germany, Belgium, Brussels, UK, France, Paris, Denmark, etc., are actively taking measures to boost e-bike sales.

RESTRAINT:Government regulations and lack of infrastructure

Regulations and terminologies surrounding e-bikes vary across countries. While some nations have national regulations, states and provinces determine the authority and legal road use regulations. Any changes or updates in e-bike regulations have an impact on market demand. For instance, China introduced regulations classifying bicycles as e-bikes only if they possess pedal assist, have a maximum speed of up to 25 km/h, and a motor power of up to 400 watts. Any e-bike exceeding 25 km/h is classified as a moped. Similarly, certain European and Asia Oceanic regions restrict Class-II and Class-III e-bikes due to their higher speeds and throttle to avoid traffic complications. However, India allows Class-II e-bikes. Most European countries, except for Italy and the UK, have banned Class-II e-bikes as per European Union regulations. Class-III e-bikes have limited presence in Europe. California prohibits class 3 e-bikes with throttle, while Colorado and Washington do not allow e-bikes with electric motors exceeding 750 watts. Inadequate infrastructure, such as bike paths and lanes, poses another obstacle to the development and growth of the e-bike market, particularly in emerging markets like India, Japan, Canada, and Mexico. Efforts are being made in some North American cities to overcome these constraints. For example, New York City has implemented measures to address this issue, including opening roadways to pedestriansand constructing protected bike lanes.

OPPORTUNITY: The trend toward connected e-bikes

Connected e-bikes are advanced and intelligent bicycles that can communicate essential data about their condition and usage. In some cases, these bikes can even receive remote information and commands. Connected e-bike systems enable both data gathering and mining. Companies like Specialized Bicycle Components Inc (US) and Shimano Inc (Japan) are actively developing connected solutions, such as mission control features and e-tube ride functionality, to enhance the customer experience. Consequently, manufacturers are focusing on technological advancements and service offerings to support customers in a more sophisticated manner.

According to a United Nations report, approximately 70% of the global population will reside in urban areas by 2050, leading to increased traffic congestion. This shift, coupled with trends like urbanization, digitalization, and sustainability, creates a significant opportunity for the connected e-bike market to flourish and expand in the foreseeable future.

CHALLENGE: High cost of e-bikes

The price of e-bikes presents a key challenge for potential buyers. While traditional bicycles average around USD 400, e-bikes are considerably more expensive, ranging from USD 1,500 to USD 1,700, and can reach up to USD 5,000, with premium models costing even more. The cost of e-bikes varies across regions, with Europe and North America being more technologically advanced, resulting in higher prices. In contrast, the Asia Oceanic region is more price-sensitive.

Previously, China predominantly used lead acid-equipped e-bikes, which were priced between USD 400 and 500. However, a new regulation implemented in China in 2019 mandates the use of lithium-ion batteries in all e-bikes, increasing their cost to USD 700-800. Consequently, consumers may opt for electric two-wheelers or scooters within the same price range, potentially leading to a decline in e-bike sales. A survey conducted by Shimano revealed that nearly 40% of respondents cited this cost issue as a concern.

Manufacturers face the challenge of reducing the price of e-bikes without compromising build quality or performance. However, offering pricing incentives to encourage e-bike purchases could effectively address these cost challenges.

E-Bike market ecosystem

The analysis of the e-Bike market ecosystem reveals the involvement of various players, including raw material suppliers, component manufacturers, e-Bike manufacturers, and end users. There are two primary motor drive technologies used in e-Bikes. The first is the hub motor drive, which is positioned on the front or rear of the e-Bike, with the motor integrated into the wheel hub. The second is the mid-drive motor, which is designed to be incorporated into the bottom bracket of the bicycle frame, providing better rider balance. Lithium-ion batteries are the most commonly used type of batteries in e-Bikes, with lead acid batteries being phased out, despite their popularity in the Asia Oceanic region due to their affordability and easy availability.

Growing demand for electric mountain bike (e-MTB)

The demand for e-MTBs has experienced significant growth compared to other types of e-Bikes, such as city/urban and cargo e-Bikes, in recent years. Europe leads the e-MTB market, followed by North America and the Asia-Oceanic region. There has been an increasing interest in mountain biking in Europe, with Eurobike reporting that nearly one-third of e-Bikes sold in Germany are e-mountain bikes. Europe's strong market for mountain e-Bikes can be attributed to the growing percentage of trips made by bicycles. The younger adult demographic (18-30 years old) predominantly favors mountain e-Bikes due to their robustness. In the European e-Bike riding community, males make up 90% of the riders.

In North America, mountain biking has gained popularity as an off-road sport. Crossroad biking has also become popular, particularly among women and children, diversifying a sport that was previously male-dominated. Various cycling organizations, such as the League of America Wheelman, IMBA, and Bike Centennial, have undertaken initiatives and projects to encourage more individuals to participate in this sport. The Asia-Oceanic region is also experiencing growth, with e-MTBs being the preferred segment of e-Bikes in countries like India. The region's interest in adventure and fitness has contributed to the popularity of e-mountain bikes.

The Class-I segment is projected to be the largest in the e-Bike market

The market for Class-I e-Bikes is projected to grow throughout the forecast period. With a growing preference among customers for easy and effortless riding, the market share of Class-II e-Bikes is also predicted to increase. However, Class-I e-Bikes are projected to remain the largest segment in the e-Bike market, although they are expected to experience slower growth compared to other classes. Class-I e-Bikes are particularly popular in countries like China, Japan, South Korea, and Taiwan, where they are the only class of e-Bikes allowed. This results in Class-I e-Bikes occupying the largest market share in the Asia-Oceanic region.

North American E-Bike market by value is projected to grow during the forecast year 2023-2030

North America is experiencing the fastest growth in the e-Bike market during the forecast period, primarily driven by various government incentives and rebate programs in the US. For example, in February 2022, the US House of Representatives passed a bill proposing a 30% tax credit for the purchase of new electric bicycles, aimed at making e-Bikes more affordable for Americans. As a result, the demand for Class-I e-Bikes is growing globally.

In the North American market, city e-Bikes are expected to hold the largest market share due to increased adoption for daily commuting, recreation, and fitness activities. The popularity of trekking and mountain biking as off-road sports and recreational activities is also contributing to the rising demand for e-MTBs. Additionally, crossroad biking has gained popularity, especially among women and children, leading to increased demand in that segment. Government initiatives, such as incentives for cargo e-Bikes to reduce emissions, further contribute to the growing demand for e-Bikes in North America.

After the initial impact of the pandemic, E-Bike sales gradually recovered to their pre-pandemic levels. In 2020, E-Bike sales in the US and Canada increased by 19% and 3% respectively compared to 2019. The US emerged as the largest market for E-Bikes in North America in 2021.

E-Bikes are considered a sustainable mode of transportation, contributing to environmental protection and reducing carbon footprint. The emphasis on maintaining the ecosystem and reducing toxic emissions has been a significant driver for the adoption of e-Bikes in North America. Governments at various levels have initiated projects to improve biking infrastructure, including the development of dedicated bicycle highway lanes for e-Bikes.

Key Market Players

The major players in the e-Bike market include Accell Group NV (Netherlands), Giant Manufacturing Co., Ltd. (Taiwan), Yadea Group Holdings., Ltd. (China), Yamaha Motor Company (Japan), and Pedego (US). These companies employ strong global networking, engage in mergers and acquisitions, form partnerships, and focus on technological advancements to maintain their positions in the global e-Bike market.

Market Definition

An e-Bike refers to a bicycle equipped with a small electric motor and a rechargeable battery that assists the rider's pedaling power. The battery of an e-Bike can be recharged by connecting it to a power source. Typically, it takes 6 to 8 hours to fully charge the battery, providing a travel range of 35 to 50 km at an average speed of around 20 km/h.

Recent Developments

• In October 2022, Yadea Group introduced the Y80 e-Bike featuring a 350W motor that delivers 100Nm of torque. It is powered by a 36V 10.5Ah high-capacity battery, enabling a range of up to 80 km.
• In April 2022, Pedego Electric Bikes opened a store in Orlando, Florida, catering to the growing market in the region by offering sales, rentals, and services.
• In January 2022, Yamaha unveiled two new models of e-Bikes designed for all-terrain mobility as part of their sports electric-assist bicycle product range.
• In September 2022, Pedego launched the Pedego Avenue, equipped with a 500-watt motor, balanced frame geometry, and an integrated battery, providing riders with comfort on challenging hills.
• In January 2022, Giant introduced the all-new Trance X E+, an adaptable and versatile E-MTB designed to enhance riders' capabilities across various terrains.

E-bike Market Segmentations

Class

• Class-I
• Class-II
• Class-III

By Speed

• Up to 25 Km/h
• 25-45 Km/h

By Motor type

• Mid
• Hub

By Mode

• Pedal Assist
• Throttle

By Component

• Batteries
• Electric Motors
• Frames with Forks
• Crank Gears
• Wheels
• Motor Controllers
• Brake Systems

By Usage

• Mountain/Trekking
• City/Urban
• Cargo
• Others

By Battery type

• Lithium-ion
• Lithium-ion Polymer
• Lead Acid
• Others

By Battery Capacity

• <250W
• >250 & <450W
• >450 & <650W
• >650W

By Ownership

• Shared
• Personal

By Motor Weight

• <2 kg
• >2 kg & <2.4 kg
• >2.4 kg

By Region

• North America
• Europe
• Asia Oceanic

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