Important Changes at US E-bike Market
WASHINGTON, USA – The USA has been a market that frustrates many in the electric bike world. While Europe has adopted e-bikes with great vigour and speed, the USA has lagged by about 10 years. But that seems to be both in the past. The USA market is growing significantly although it is not as big as anyone would like for it to be.
The reasons are simple: while the USA is a big market (some 319 million consumers) and easily accessible, with business friendly laws, one language, one transportation system, and one legal system for this large and generally affluent market – two wheelers of any sort in the USA are regarded as sport, fitness, and recreation. Not…transportation.E-bikes have been, until recently…transportation. However important changes are occurring that are all favourable for e-bike sales. And this is showing results in the market place.
A car is an unneeded inconvenience
While the USA is a large, seemingly homogeneous, population, it is better to think of the country as hundreds of local markets, with many of them uninterested in e-bikes, and others very interested. Areas like Florida that have large numbers of recreationally minded retirees, while dense urban areas like Boston, New York, San Francisco and Portland have large numbers of younger people for whom a car is an unneeded inconvenience, are hot spots for e-bike sales. The traditional environment of suburbia, found all over the USA, is not as interested in e-bikes for reasons of practicality. For most of USA, transportation is a car.
Baby Boomers and Millennials
Two demographic groups concentrate the market for e-bikes. The Baby Boomers, now age 55 to 70 are about 25% of all Americans. They have spent more money on bicycles in their lives than any other demographic group in human history. But they do not ride them much, and the Baby Boomers are now older and not in good physical condition. This makes them ideal candidates for e-bikes.
The Millennials, again about 25% off all Americans, are the children of the Boomers, now in their 20’s and early 30’s and are challenged by a poor economy, limited job prospects, debt from educational expenses, and they would prefer to avoid the expense of a car. This group is buying bicycles or e-bikes.
When comparing the cost of an e-bike to the cost of a car the price of the e-bike is not an important issue. But the cool factor, and the reliability of the e-bike is very important. For the millennials, bicycles and e-bikes are becoming important transportation.
Distribution has changed. There has been a popular generalization in recent years that about a third of all e-bike sales are through mass merchants, another third though internet and a third through bicycle shops. However it appears from examining import records that the lowest priced e-bikes are not growing rapidly in sales volume.
It is noteworthy that one of the most experienced e-bike distributors Currie Tech, owned by Accell North America has withdrawn from the sales of their popular sub 600 dollar bike at Sams Club, WalMart, Amazon, etc. Volume of the imports of companies that do serve Amazon, and Walmart are not that impressive. More and more attention is centred on higher and higher end e-bikes. This has fuelled sales of Stromers, A2B, OptiBike, Raleigh, Faraday, and others.
But it is also noteworthy that while more expensive bikes appear to be growing, the traditional bicycle brands are not importing large numbers of e-bikes. Despite having an advantage in distribution and service, as well as dealer interest, their numbers are small compared to the imports of e-bike specialty brands and dealers. There are bicycle shops in NY area that import more e-bikes than all of the major bicycle brands.
Sourcing changing as well
Manual bicycles in the USA, are almost all purchased by bicycle brands from Asian OEMs. While Kent has a new assembly plant in the USA for low priced manual bikes, it is early days. E-bikes have, likewise, been almost exclusively sourced from Asian OEMs as complete bikes in a box. But now it seems that the bestselling e-bike in the USA is one assembled in Florida by Prodecotech.
Today, nearly every traditional bicycle brand is offering an e-bike. Alongside many e-bike specialists that offer only e-bikes. The number of brands is well over 100, and changes nearly every week. A very important phenomena is the increasingly strong interest in e-bike sales by consumer products companies, car parts makers, and car companies. Ford, BMW, Daimler, VW and Hyundai have all shown e-bikes.
The regulatory environment in the USA is complex. While the federal law is clear, there are variations created by state laws, and even by local laws. An excellent paper on this subject is posted on the LEVA website. www.LEVAssociation.com Additionally, there is a push by some e-bike brands, working as a committee of the BPSA to create new categories of e-bikes, primarily in support of the perceived market for speed pedelecs.
The exact legal position of speed pedelecs bikes is ambiguous in the USA. The law is not clearly written to support speed pedelecs, and it can be argued that the bicycle guys are simply trying to sell electric mopeds without conforming to the safety and registration / licensing requirements of such vehicles. So until the BPSA is successful in their state level effort the exact position of speed pedelecs is uncertain.
Any one selling a speed pedelec in the USA is taking some risks in the event of any injury. Injuries in the USA often result in product liability lawsuits that can be very expensive. Oddly, there are very few speed pedelecs sold in the USA, yet this category, appealing to the sport side of cycling, has a great deal of attention.
That great attention is also given to another relatively rare product in the USA: the Bosch equipped bike. There are not a lot of these in the USA at this moment. But they get disproportionate attention from brand managers, dealers, and media due to the news of success we hear from Europe.