Tesla isn’t dominating the electric bike market, but here are the players that might

The Harley-Davidson LiveWire electric bike does not have massive gross sales but, but CEO Jochen Zeitz lately remarked throughout an earnings name, “It’s also attracting new riders, new customers to the brand that might not have considered Harley-Davidson before.”

Source: Harley-Davidson

Tesla reached a $500 billion market valuation this week, an indication of its dominance in the electric automobile market. But Elon Musk has proven no actual curiosity in a single rising EV phase: battery-powered scooters and bikes. An accident he suffered as a youth on a bike — almost deadly, Musk has stated — turned him off two-wheelers, for now. But the manufacturing of battery powered bikes is rising and consolidating, which suggests it is prone to produce a number of dominant players in the years to come back. 

The electric bike and scooter market reached $30 billion in 2019, in keeping with a June 2020 report by Preeti Wadhwani and Prasenjit Saha from the analysis firm Global Market Insights (GMI). They estimated that the market — which incorporates every thing from massive bikes meant for interstate cruising to tiny stand-up scooters as utilized by Lime and Bird — will develop greater than 4% yearly for the subsequent few years and hit $40 billion in 2026.

Concerns over vehicular emissions, rising client consciousness about air air pollution, and rising investments by authorities authorities in the growth of EV charging infrastructure are all anticipated to maintain the market rising. Another issue boosting electric bike prospects is the continued enchancment in batteries.

E-bikes, scooters and bikes

Electric bikes and scooters are nonetheless comparatively dear, and none but matches the vary of the greatest fuel bikes, but that’s slowly altering. Lithium ion battery prices are down 85% in the final decade, stated Garrett Nelson, senior fairness analyst at CFRA Research. Within one other 10 years, electric bikes can obtain value parity with fuel bikes, he predicts. 

“The playing field is wide open,” says Nelson. He famous that Honda, Yamaha and Harley-Davidson collectively management about two-thirds of the international bike market, and are every growing electric motorbikes. So too are different massive established players, reminiscent of the Indian-multinationals Hero Motors and Bajaj Auto, and a few smaller electric-only startups, together with Zero Motorcycles and Energetica.

Electric mobility is resulting in a producing growth for automobiles sized between small foldable scooters and full-on bikes, stated Sam Korus, an analyst at ARK Invest, which is understood for its massive guess on Tesla. Uber led a spherical of investment in Lime earlier this 12 months, whereas Bird is reportedly contemplating a public providing by a particular goal acquisition firm (SPAC).

E-scooters from the electric scooter-sharing suppliers Lime and Bird in Hannover, Germany.

Hauke-Christian Dittrich | DPA | Picture Alliance | Getty Images

Troy Siahaan, a street check editor at, races a light-weight custom-built electric bike, giving him perception into the similarities and variations between fuel and electric two-wheelers.

“The riding experience of an electric bike is similar to gas-powered motorcycles in that you twist the throttle and go,” he stated, “but you don’t get sound, vibration or engine heat with electric bikes. By and large, they also don’t require shifting, so they’re easier for new riders than most gas bikes.”

Siahaan additionally likes the torque output — a measure of the acceleration — of electric bikes, since it’s all out there at the outset.

Nelson famous that most development proper now could be in the small- to mid-sized part of the electric bike and scooter market. These are fashionable in China and Southeast Asia, the place two-wheelers are extra frequent as a mode of transportation, and air pollution and noise discount are socially and environmentally interesting.

Post-Covid-19 demand in city mobility

Korus stated Chinese scooter producer NIU is amongst the promising players working in the area between small folding scooters and huge bikes. The firm, which went public in 2018, sells its app-supported sensible scooters in 38 nations throughout Asia, Europe and North and South America. Its inventory has risen sharply. The fashionable sit-on scooters provide as much as 87 miles of vary (140 km), multi-color dynamic gauge shows and GPS-based anti-theft programs.

NIU’s main competitors are low-cost producers in China, which make scooters that are much less “smart” than its choices, in addition to the higher-end players out of Asia and Europe, which are usually priced increased. A NIU mannequin might promote for roughly $3,100, whereas a comparable Honda is over $5,000, a Vespa over $7,000, and a BMW anyplace from $10,000 to $15,000, in keeping with Vincent Yu, a Needham & Co. analyst. 

NIU Technologies’ inventory value has risen sharply, and it’s worthwhile, although questions stay about how massive the two-wheeled electric scooter market will likely be.

Korus famous that NIU’s software program actively collects information that can be utilized to help autonomous driving and permits the firm so as to add worth on prime of simply promoting merchandise. This can also be a key characteristic of Tesla’s enterprise mannequin, which ARK Invest CEO Cathie Wood has pointed to in her bullish thesis on Musk’s firm. But for NIU, monetization of autonomous driving could also be pretty far off into the future. Yu stated at this time there may be excessive worth in the sensible options centered on theft prevention and automobile upkeep, for instance, figuring out when components want alternative. Its light-weight lithium-ion batteries are additionally a bonus over heavier, older electric scooters as shoppers search for extra moveable batteries that are simpler to swap out and in.

A giant query for NIU is simply how massive the market can get and whether or not it might develop each manufacturing capability and a retail retailer community together with it, Yu stated. Asia continues to be closely reliant on petroleum-based scooters, particularly Southeast Asia, but that is altering. And, as the world emerges from the Covid pandemic, Yu is betting extra vacationers will shrink back from mass transit and go for scooters. In nations like China, they are a lot simpler to acquire than automobiles due to decrease prices and fewer regulation and allowing necessities, particularly in bigger cities.

NIU instructions over 26% of the Chinese e-scooter gross sales market, and has risen in Europe to No. Three over the previous two years. Yu added that NIU is constructing a brand new manufacturing unit, focusing on main Southeast Asian markets like Indonesia, and including extra shops round the world to capitalize on the demand. In Q3, the firm opened 182 shops and now has one other 100 below development.

Harley-Davidson and the electric future

In the U.S., smaller bikes appropriate for city transportation and solely occasional freeway use are not as fashionable as in Asia and Europe. Nelson stated U.S. consumers are usually older and favor bigger bikes with conventional seems and the signature sounds of a combustion engine.

Harley-Davidson, the largest and oldest U.S. bike producer, has addressed these consumers with its LiveWire, an electric bike with conventional cruiser styling and a formidable 105 horsepower that lets it speed up to 60 miles per hour in a fast 3.1 seconds. The LiveWire is 7-feet lengthy and almost 550 kilos, giving it the measurement and weight to slot in with the firm’s mainstream gas-powered choices, but, at $30,000, it is simply too costly for a lot of potential prospects.

With the conventional American bike purchaser growing older, Harley gross sales are down nearly 40% since their peak in 2006. “Demographics will be a problem for them,” Nelson stated.

We consider electric must play an necessary position in the way forward for Harley-Davidson.

Jochen Zeitz

Harley-Davidson CEO

Harley is dedicated to electric below a comparatively new administration staff, led by CEO Jochen Zeitz, who earned excessive marks for his deal with sustainability as CEO of Puma. “We believe electric needs to play an important role in the future of Harley-Davidson,” he lately advised Wall Street analysts. He stated gross sales volumes are low relative to conventional bikes, but added, “It must be an important segment in the long term future of the company and it’s also attracting new riders, new customers to the brand that might not have considered Harley-Davidson before.”

Craig Kennison, who covers Harley for RW Baird, stated the precedence for Zeitz and his staff is to shore up Harley’s funds and focus its enterprise on the key markets the place it might generate the most income from core shoppers at this time, and it’ll proceed to generate the overwhelming majority of its enterprise from its V-twin inner combustion engine cycles (gross sales for LiveWire are not disclosed but the assumption is they continue to be very minor). “It’s not a big number,” Kennison stated.

Similar to the path chosen by Tesla to first deal with the luxurious client, Harley must excellent the electric bike know-how and given the value factors at this time — it can not alone management the value curve in key areas like battery know-how — solely over time will it develop into extra reasonably priced to a bigger client market. But if Harley makes the proper selections on present profitability facilities, it should help the funding in electric automobiles over the many years to come back, he stated. “Right now Harley has a huge market and needs to make as much money as they can, and servicing the core customer, which is still highly profitable, is the focus.”

Harley is headed into the pedal bicycle market as nicely. It lately introduced that it should spin off its electric bicycle effort, which has been in analysis and growth for just a few years, retaining a minority stake in the new agency, Serial 1 Company, a reference to its first-ever machine.

Targeting the e-bicycle market, with pricing beneath $5,000, is a great transfer by Harley’s new administration, because it makes the model reasonably priced for the lots in a rising phase, stated Brandon Rolle, Northcoast Research analyst. And much like NIU’s goal scooter market, riders might not want a driver’s license to function these automobiles, which is able to assist in Harley-Davidson’s attraction to city commuters and informal leisure cyclists.

High-end bicycle makers like Specialized have an early lead on this market — e-bikes which generate energy that is multiplied by the human pedaling exercise — and it does have the potential for widespread attraction in the future, in keeping with Kennison. “It lets ‘the everyman’ get on the road …  especially during the pandemic people want to get outside and bicycling is a great way to do it, but depending on your fitness level, having the added electrical power creates a totally different experience. You can go 20 to 50 miles and it changes the appeal” he stated.

Harley’s bike rivals

In the close to future, pent up demand for outside merchandise attributable to Covid-19 may benefit bike makers, together with Harley, which has had a “rough last five years” in keeping with Wedbush Securities analyst James Hardiman. “A lot of investors have looked at Harley-Davidson and the broader motorcycle one as not benefitting,” from the new outdoor growth, the analyst stated. But trade gross sales and used gross sales are each up, and people are precursors for a broader-based restoration in bike gross sales, Hardiman lately advised CNBC. While the bear case about the growing older demographics isn’t going away, it has been that manner for a decade already, he stated.

Among Harley’s rivals for the future full-size bike purchaser are not simply conventional players like Honda and Yamaha, but Zero and Energetica, which have a few of the most superior electric bike know-how at present out there, Siahaan stated.

Zero, based in Santa Cruz, California, in 2006, isn’t a family identify, but it is one among the most established players in the area. It started promoting electric bikes in 2009, making it one among the very first manufacturing two-wheelers (the earliest manufacturing electric bikes and scooters appeared in the 1970s and 1990s, respectively, but loved restricted success).

Zero’s present all-electric line-up consists of every thing from the FX, a small on- and off-road succesful “dual-sport” bike beginning at $9,300, all the manner as much as the SR/S sportbike which begins at $20,000. The 110-horsepower SR/S can attain 124 miles per hour and is able to greater than 200 miles of vary when geared up with an enhanced battery. The FR/S is so superior Road and Track alluded to Zero getting near the being the Tesla of two wheels in its overview. Zero presents it with an app that lets customers modify the bikes most pace, energy, torque and regenerative braking parameters.

A Zero FX electric bike simply after buy in June 2019 at a Chicago, Illinois, retailer. Built in California, Zero bikes have been the best-selling electric bike model on the market. Harley-Davidson’s CEO claims that because it launched the LiveWire, its model has promoting nicely, but the Zero FX and a more moderen cheaper mannequin, Zero FX/S, are as little as one-third the value of a LiveWire.

Scott Olson | Getty Images News | Getty Images

Zero reached a 10-year take care of Polaris, a leisure automobile powerhouse, that ought to give it the assets to additional broaden manufacturing and distribution. It will deliver Zero’s powertrain know-how and software program to Polaris’ lineup of snowmobiles and off-road automobiles.

The high-end model Energetica was shaped in 2010 as a subsidiary of CRP Group, a motorsport and aviation producer based mostly in Modena, Italy. It presents a small lineup of attractively styled bikes beginning at $17,600 for the general-purpose Eva EsseEsse9, and ending with the top-of-the-line Ego+. The latter is a 145-horsepower sportbike with an eye-watering beginning value of almost $24,000, but a 150 mph prime pace and as much as 250 miles of vary.

Saha of the Global Marketing Institute advised CNBC that the firm is investing extremely in R&D and owns a number of patents associated to electric automobile manufacturing in Europe, Asia, and North America.

Of course, as the largest bike producer in the world, Honda Motorcycles of Japan, isn’t standing nonetheless. It lately filed patents for electric-powered variations of its CB125R and CB300R, these are small, straightforward to handle normal goal bikes with “café racer” styling.

Saha notes that Honda can also be making massive investments in the growth of swappable battery know-how for electric bikes to permit riders to rapidly exchange the batteries after use. These strikes, and components like its international vendor and distribution community will assist Honda, Saha stated.

Tesla transferring past automobiles

And then there may be Tesla. Though Musk has stated the firm won’t produce a street bike, he has introduced plans to launch an electric all-terrain automobile, the Cyberquad, late in 2021, and has at the least teased the risk of at some point making a two-wheeled electric bike. In the least, Tesla might simply pivot a portion of its battery enterprise to supplying different producers, says Nelson.

Generating income is an enormous concern for any start-up, but particularly in the electric bike area, the place federal and state-level regulation abound and client expectations are excessive. Many of the corporations that first entered the electric two-wheeler market place have failed or been absorbed by bigger players. This consists of Brammo, which launched in 2002 and offered bikes with six-speed transmissions like these in conventional fuel bikes reasonably than the single-speed automatics most electric producers use. It was first bought by the leisure automobile maker Polaris in 2015, then engine maker Cummins in 2017. Brammo-branded bikes are not offered, but its know-how lives on with its purchasers.

An analogous destiny befell Alta Motors, a maker of technologically superior off-road electric bikes. The firm shuttered operations in 2018 and its property had been taken over by Bombardier‘s Recreational Products enterprise in 2019 to be used throughout its product lineup, which incorporates Ski Doo snowmobiles and the Can-Am line of three-wheel bikes.

“It’s always difficult to predict the future,” Siahaan stated. “A lot of companies come out with big, bold announcements, but never even come to market.”

“It’s very early, so it is difficult to see how it all plays out, but that’s typical of a true growth market,” added Kennison.

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