E-bike Market

The global E-bike market was valued at USD 77.2 billion by 2028 and is expected to reach USD 51.5 billion in 2023, at a CAGR of 8.4% from 2023 to 2028. The worldwide demand for e-Bikes is growing rapidly as customers see e-Bikes as an eco-friendly solution for commutes, with rising fuel prices adding to support the inclination. Government bodies in various cities worldwide have undertaken initiatives to build bicycle highway lanes for e-Bikes.

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Market Dynamics

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

The electric bicycle (e-bike) is a low-emission mode of transportation that offers benefits in the areas of health, time, cost, safety, congestion, air & noise pollution, and energy security. Over short distances, e-Bikes are a more efficient alternative to other means of transportation. E-bike riders save money and with contribute to less environmental impact. However, the production of e-bike components such as battery batteries or drives, cause more emissions. In everyday life, the eBikes can be used instead of the cars in many situations, such as going shopping with a cargo bike. The energy requirement of an e-bike is around 11.2 Wh of electricity per mile travelled, which is very low. According to the Federal Environment Agency, a car emits about 240 g CO2 per passenger mile (pkm), while public transportation emits between 80 and 176 g CO2 per passenger mile. The bicycles and the eBikes have significantly lower emissions, as compared to other modes of transportation.

Hence, to meet the carbon emission targets and to encourage more and more people to opt for cycling, government across the globe are introducing various incentives and rebate programs. Countries like The Netherlands, Germany, Belgium, Brussels, UK, France, Paris, Denmark, etc. are taking initiatives to boost e-bike sales.

RESTRAINT:Government regulations and lack of infrastructure

Government laws and terminologies are diverse regarding e-Bikes. Some countries have national regulations, but states and provinces decide the authority and legal road use regulations. Therefore, any change/update in the regulation of e-Bikes impacts the market demand. For example, China announced a regulation on e-Bikes wherein bicycles are classified as e-Bikes only if they can pedal assist, have a maximum speed of up to 25 km/h, and have a motor power of up to 400 watts. Any e-Bike offering a speed above 25 km/h is considered a moped.

Similarly, Class-II and Class-III e-Bikes are restricted in some European and Asia Oceanic regions due to their high speed and throttle to avoid traffic complications (except in India, which allows Class-II). Except for Italy and the UK, most European countries have banned Class-II e-Bikes per European Union regulations. Class-III e-Bikes have a limited presence in Europe. California does not allow class 3 e-bikes with throttle, and Colorado & Washington do not allow e-bikes with electric motors above 750 watts.

One of the other restraining factors for the development and growth of the e-Bike market is the lack of infrastructures, such as bike paths and bike lanes, in emerging countries of Asia Oceanic and North American regions, such as India, Japan, Canada, and Mexico. Some cities in North America are making efforts to overcome these restraints. For instance, New York City has seen a dramatic drop in vehicular traffic, opened 12 miles of roadways to pedestrians in May 2020, and added nine more miles of protected bike lanes to overcome these restraints.

Therefore, the regulations and lack of infrastructure restrain the growth of e-Bikes, especially in the emerging markets of North America and Asia Oceanic.

OPPORTUNITY: The trend toward connected e-bikes

Connected e-bikes are intelligent and omniscient bikes capable of communicating key data on their condition and use. In some cases, connected bikes can also receive information and commands remotely. Connected e-bike systems allow both data gathering and data mining. Companies are coming forward to develop connected solutions, like Specialized Bicycle Components Inc (US), which has developed mission control and ride features in its product offerings. Shimano Inc (Japan) has developed an e-tube ride feature. Thus, apart from e-Bikes, manufacturers focus on developing technologies and services to support customers in an advanced manner.

According to a United Nations report, ~70% of the world’s population will live in cities, resulting in more road traffic congestion by 2050. Megatrends such as urbanization, digitalization, and sustainability are emerging. Therefore, the trend for connected e-Bikes would create an opportunity for the e-Bikes market to develop and grow during the forecasted period.

CHALLENGE: High cost of E-Bikes

Price is one of the determining factors during the purchase of an e-Bike. Traditional bicycles, on average, costs nearly USD 400, whereas e-Bikes are expensive, as their cost ranges between USD 1,500 and USD 1,700 and can go up to USD 5,000, with some premium models almost double that. The price of an e-Bike varies across regions. For example, Europe and North America are more technologically advanced and tech-oriented, resulting in the high cost of e-Bikes. This bike is price sensitive in the Asia Oceanic region, which can be a potential buyer challenge.

Earlier, lead acid-equipped e-Bikes were prevalent in China. Their price ranged between USD 400 and 500. However, according to the new regulation announced in China in 2019, all e-Bikes must be equipped with lithium-ion batteries, increasing the cost of e-Bikes to USD 700-800. Therefore, with increased e-Bike prices, consumers would prefer electric two-wheelers or scooters, which fall under the same price range. This might result in a decline in e-Bike sales. According to a survey by Shimano, almost 40% of the respondents cited this issue.

Therefore, manufacturers face a challenge to reduce the costs of e-Bikes without declining the build quality and enhancing the performance. However, offering pricing incentives for purchasing e-Bikes may effectively promote e-Bikes and tackle the cost challenges.

E-Bike market Ecosystem

The ecosystem analysis highlights various e-Bike market players, primarily represented by raw material suppliers, component manufacturers, e-Bike manufacturers, and end users. There are two major motor drive technologies used in e-Bikes. First, a hub motor drive is positioned on the front or rear of an e-Bike, with the motor placed in the wheel hub. The second is the mid-drive motor, a frame specifically designed to incorporate the motor in the bottom bracket of the bicycle, which provides a good balance to the rider. Lithium-ion batteries are the most widely used in e-Bikes. Lead acid batteries, popular in the Asia Oceanic due to their low cost and easy availability, have been phased out.

Growing demand for electric mountain bike (e-MTB)

e-MTB has witnessed a rapid increase in demand compared to other types, such as city/urban and cargo e-Bikes, in recent years. The e-MTB market is led by Europe and followed by North America and Asia-Oceanic. Interest in mountain biking is also increasing in Europe. According to Eurobike, almost every third e-Bike sold in Germany is an e-mountain bike. Europe is the largest market for mountain e-Bikes, owing to an increase in the percentage of trips made by bicycles. The growth in the number of trips by e-Bikes has been witnessed among young adults between 18 and 30. This age group mostly prefers mountain e-Bikes as they are robust. In e-Bike riding, the European region is dominated by males, with 90%.

In North America, mountain biking is one of the off-road sports gaining popularity. Crossroad biking is also popular in this region due to the rising number of women and kids entering this sport, which became male dominated earlier. Many cyclist organizations, such as League of America Wheelman, IMBA, and Bike Centennial, have undertaken initiatives and projects to encourage more individuals to enter this sport. The Asia Oceanic region is also growing, and e-MTB is the preferred segment of e-Bikes in countries like India. People's interest in adventure and fitness has led 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 would grow during the forecast period. With the inclination of customer preference toward easy and effortless riding methods, the Class-II e-Bikes market is predicted to increase its market share during the forecast period. Class-I e-bikes are projected to be the largest e-bike market during the forecast but are projected to witness the slowest growth during the forecast period. Class-I are expected to lead the market in countries such as China, Japan, South Korea, and Taiwan. These countries allow only class-I e-Bikes. This results in class-I e-Bikes occupying the largest market share in the Asia Oceanic region.

North America is growing at the fastest rate during the forecast period, as in the US, various incentives and rebate programs are being implemented by the government. For instance, On February 2022, the US House of Representatives passed a bill proposing a 30% tax credit for purchasing new electric bicycles in the US. The goal is to make it easier for Americans to afford electric bikes. Hence the demand for class-I e-bikes is growing across the globe.

North American E-Bike market by value is projected to grow during the forecast year 2023-2028

In North America, city E-Bikes are expected to account for the largest market share, due to the increased adoption of electric bikes for daily commuting, recreation, and fitness activities. Trekking and mountain biking is one of the off-road sports and recreational activity mediums gaining popularity in the region which is why the demand for e-MTBs is increasing. Crossroad biking has also gained popularity due to the rising number of women and kids entering this sport. Several cyclist organizations, such as League of America Wheelman, IMBA, and Bike Centennial, have undertaken initiatives and projects to encourage more individuals to enter this sport. Thus, all these factors lead to an increase in the demand for mountain and trekking E-Bikes. To reduce emissions, governments in North America are offering incentives to purchase cargo E-Bikes. These factors would increase the demand for E-Bikes in North America during the forecast period.

After the reduction in the severity of the pandemic, things gradually returned to their initial state. The US and Canada witnessed an increase in E-Bike sales by 19% and 3%, respectively, in 2020 compared to 2019. The US was the largest market for E-Bikes in 2021 in the North American countries.

E-Bikes prove to be a sustainable source for commuting and even protecting the green environment. The quest to maintain the ecosystem and reduce the release of toxic elements into the atmosphere and carbon footprint is significant for the rapid response to North American E-Bike adoption. The government’s involvement in using sustainable E-Bikes has also acted as a catalyst to increase market demand for E-Bikes in North America. Government bodies in various cities worldwide have undertaken initiatives to build bicycle highway lanes for E-Bikes. The emphasis has also been laid on improving biking infrastructure.

Key Market Players

The key players in the E-Bike market are Accell Group NV (Netherlands), Giant Manufacturing Co., Ltd. (Taiwan), Yadea Group Holdings., Ltd. (China), Yamaha Motor Company (Japan), and Pedego (US). Major companies' key strategies to maintain their position in the global e-bike market are strong global networking, mergers and acquisitions, partnerships, and technological advancement.

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Scope of the Report

Market Definition

e-Bike refers to a bicycle with a small electric motor and a rechargeable battery to assist the power provided by the rider. Batteries of an e-bike can be recharged by connecting them to a plug. A typical e-bike needs 6 to 8 hours to charge the battery and has a range of travel of 35 to 50 km at a speed of about 20 km/h.

Recent Developments

• In Oct 2022, Yadea Group launched the Y80 e-bike feature with a 350W engine delivering 100Nm torque powered by a 36V 10.5Ah large-capacity battery that can reach up to 80km of range.
• In April 2022, Pedego Electric Bikes opened a store in Orlando, Florida, which offers sales, rentals, and services for the growing market in the region.
• In Jan 2022, Yamaha introduced two new models of an e-bike for all-terrain mobility under the sports electric-assist bicycle product range.
• In Sep 2022, Pedego launched the Pedego Avenue features with 500-watt motor features, balanced frame geometry, and an integrated battery, which gives the rider comfort on pesky hills.
• In Jan 2022, Giant unveiled the all-new Trance X E+, a versatile and adaptable E-MTB designed to extend the rider's capabilities on various terrains.

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