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Tariffs on E-Bikes from China Derailing U.S. Market

Sales & Trends

FORT MEYERS, USA – Recent imposition of tariffs on electric bikes and component parts from China, may have derailed the rapid growth of electric bicycles in the USA. These tariffs result in significant price increases in a market that has been accelerating. Retailers and distributors, when asked, state that they simply do not know what the impact will be. But they are worried that such big increases will stall or kill the e-bike market.

Tariffs on E-Bikes from China Derailing U.S. Market
Even if 2018 is an off year, due to tariffs, the USA e-bike market has tremendous growth coming. – Photo Trek

Electric bicycles have become a major part of the USA bicycle business. Even established traditional bicycle brands are now re-positioning themselves as e-bike brands. For a simple reason: e-bikes make money.

Sales increasing steadily

The USA has been about 10 years behind the EU in awareness and adoption of electric bikes.  However, today, nearly every traditional bicycle brand offers an electric bike, along with many new brands focusing on electric bikes. Sales have increased steadily, while sales of conventional bicycles have decreased. As in the EU and Asia, the money-making part of the bicycle business is now the electric bicycle business.

Only one significant producer

The majority of electric bikes sold in the USA are imported from China, and even the bikes that are assembled in the USA, are built from parts made in China. While we can expect other USA factories to build e-bikes in the near future, the only one of significance, today, is Prodecotech in Florida.

Research by eCycleElectric Consultants shows approximately 300 importers of electric bikes now operating in the USA. Of these, 20 companies are importing the majority of all electric bikes. Leaders are a combination of major bike brands like Trek, Specialized, Raleigh, (Accell North America) and e-bike specialists such as Pedego, Rad Power, Mahindra, Juiced Bikes, and Faraday (Pon Group).

Generally, the established bicycle brands are selling pedelecs, in the higher price ranges. The e-bike specialists usually offer both power-on-demand (POD), and pedelecs, with the POD bikes in the lower price ranges. Some e-bike specialists offer only POD bikes.

Increasing interest from automotive companies

Automotive companies in the USA are increasing their interest. Ford has shown concept bikes and licensed their name, in the past, to Dahon and Pedego. GM has announced an electric bike will be part of their product offerings in the future, as has Harley Davidson. The effect of these large companies, with their powerful marketing and engineering, is not yet known. But speculation is that they will reshape the bicycle industry of the USA, by introducing marketing efforts and quality/engineering standards superior to the bike industry norms.

An important bit of context is that the average value of the approximately 15 million bicycles the USA imports most years is well under 100 dollars. The value of the average electric bike is above 600 dollars and is probably closer to 1,000 US dollars. Margins for the importer, distributor, and retailer are better, in most cases, on electric bikes than on manual bikes.

Expanding efforts by all distribution channels

Retail channels handling electric bikes include independent bicycle dealers, truck-based bicycle mechanics, major sporting goods retailers, mass merchants, Amazon, internet sales, power sports and automotive retailers.  All of these have been expanding their efforts.

Service training for technicians has been rapidly improving. Clinics by system providers like Bosch have joined the efforts of the Light Electric Vehicle Association, Barnett Bicycle Institute, and the Professional Bicycle Mechanics Association. An estimated 1,000 bicycle mechanics have attended one or more of these training opportunities since 2008.

The efforts of People for Bikes to harmonize and improve electric bike laws across the 50 states have helped greatly.

This effort is funded by companies that offer ebikes and are members of the Bicycle Product Suppliers Association. The 3 class system PFB is promoting has been adopted by 10 states, with up to 20 more expected in the near future.

Electric bike share is introducing consumers to electric bikes as well. The highest profile operation is JUMP, now owned by Uber, and operating in several cities.

Decreased optimism?

In 2017, the USA imported about 263,000 electric bikes. This number is arrived at by careful searching of customs databases. Since there is no uniform tariff number for electric bikes, yet, there is room for error.

In 2018 the first 6 months show imports of 73,500 units. This would seem to be a likely drop in sales, but it is too early to be certain. This could represent decreased optimism in the first half of the year or carry over of inventory from 2017.

Even if 2018 is an off year, due to tariffs, the involvement of the major brands, the many new participants focused on e-bikes, and the public awareness of electric bikes means that the USA market has tremendous growth coming.

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