Bicycles: The Wild Ride (Open Letter to the Industry)

By Ed Benjamin

The bicycle business is worldwide, old, and big. We provide one of mankind’s basic and most successful tools – effective individual transport that relies on muscle power alone. (And fun to ride!)
The biggest of conventional bicycle companies are quite impressive. Giant Bicycle, for example, is world class by any measure. As is Hero Bicycle, and others.
We are also a low margin industry that fights over market share – usually by shaving our margins. We are boring, have little hope of future profit, and no one outside the industry is much interested in investing in the bike business.

Except… for electric bikes.

The electric bicycle business has players that dwarf the bike industry. Some of these Companies have units in divisions that are larger than any conventional bike company.
The famous ones are well known:
Yamaha, Honda, Panasonic (Matsushita), Sanyo, Samsung, LG, Lenovo (Phylion Battery), Matra, Magna Mark (BionX), Bosch, Hero Group, Shinri, Yadea, others.

Why are they interested?
The reason: 100 Billion Dollars Per Year, or more, in sales. At a pretty good margin.

For a variety of reasons, it is increasingly clear that the world needs and will adopt electric powered two wheel individual transport. At an increasingly rapid pace.
The Reasons:

• Increasing demand for a limited and diminishing supply of petroleum fuels. Cars still sell very well. Many new drivers for the same amount of fuel mean very high prices for gas.
• Increasing urbanization of the human race means more people per square kilometre, with less room for roads, parking lots. Two wheelers are a solution for parking and road congestion.
• Increasing concerns about air pollution and renewable energy is leading to more and more government support for light electric vehicles.
• Increasing affluence worldwide means that more people can afford a motorized two wheeler to reduce the effort of transporting themselves, and more can afford a variety of transportation tools.

The Results: Over the next 15 years, we will see electric powered two wheelers replace nearly all mopeds, light motorcycles, and some cars. We will see them replace about half of all bicycles.
This is roughly 110 million units per year in sales.

That is interesting to any company, and especially so because this is both a way to make money and a way to be “green”. And that makes for investment that looks good in many ways.
Electric bikes are the product that works, technically, economically, and fits the regulations of today.

So they are the starting point for nearly everyone.

Since the barriers to entry are low, thousands of small companies and many large companies are investing, or exploring the idea of investing in electric bikes.
Good news for you!

Since you are reading this, you are in the bike industry. And at this moment, you are the leaders in electric powered two wheel transportation. You are in a sexy business that is attracting major attention and you are good at it!

You provide good products, good service, convenient retail locations and personalized attention to your customers. “Normal” bike companies and retailers sell the majority of the electric bikes.

Now… hang on to it. The ride is going to be fast and furious.

Source: http://evworld.com/article.cfm?storyid=1897

I agree with most of what you have written except the "We will see them replace about half of all bicycles. "

I don't know about the rest of the world but in Australia bicycle sales have gone through the roof year on year. Electric bikes have been in Australia for many years have not really taken off.

The bicycle is here to stay.It is a huge sport and will stay that way and people like the health benefits bicycles bring when using them for transport.

China might be another story.Actually I know people in China who have electric bikes but still use there normal bike when asked why the answer is "I ride my bicycle for health"

People are riding Ebikes in mad numbers in The PRC because they are cheaper than cars and motorcycles and they avoid regulation. Health has little to do with it. People need to get around and the most efficient means for them is the Ebike. In the smaller towns in China you will more easily find Ebike stores than motorcycle or even gas scooter stores. I'm thinking that in Shanghai there are just too many of them to be banned outright. They have closed down some of the shops offering custom high power Ebikes, though I believe that was more through the power of making the parts too diificult to import.