Light Electric Vehicle Association

There are more electric bicycles in use every day, today, than cars are in use everyday in the USA!  About half of all the new bicycles sold in China are electric!

And the bicycle industry that gathers in Taipei this week is making a lot of money on ebikes.

Taipei Cycle 2012 can be regarded as a celebration of the success, and the profitability of the electric bicycle.

While this is rightly regarded as a Mainland Chinese product – built in the millions by highly regarded companies like Yadea and Flying Pigeon – the Taiwanese bicycle industry has made a lot of money, and done a superb job of building the market world wide, and in Mainland China.

Award winning Taiwanese companies like Fairly Bike Manufacturing have been the leaders in highly innovative designs, and in high-end ebikes for the vigorous (and highly profitable) markets of Europe and USA.  Taiwanese management, investment, and business sophistication is evident throughout the electric bike industry.

Today, about 150 million people use electric bikes, in more than 200 countries. This, as observed by Dr. Cherry of the University of Tennessee is a historic adoption of alternative fuel vehicles. And this author observes that this product category is only about 15 years old – as compared to cars and manual bicycles, which are more than 100 years old.

And this is only the beginning!

This author predicts that electric bicycle and electric scooter markets will reach 130 million sets PER YEAR by 2025. Most of that business will be in the hands of Taiwan and Mainland based OEMs and component makers.  This includes component makers such as 8Fun Motor Company – exporting hundreds of thousands of motors to European markets, and the 5^th largest battery maker in the world, Lishen Battery of Tianjin, as well as hundreds or thousands of bicycle parts makers, young Chinese designers, and technology innovators.

It is great news for the western bicycle brands that, so far, the channel of distribution has remained in the bicycle shops, selling the famous bicycle branded electric bike product. Accell Group has probably made more profit than any other bicycle company in the world off this new product. But many other bicycle brands have also done very well.

But there is also room for new ideas and new companies: Prodeco of the USA buys components in China and assembles in the USA. Swiss Flyer of Switzerland has focused entirely on electric bicycles, as has Pedego (USA), OHM Cycles (Canada) – small but rapidly growing brands that promise to be great ones in the near future. Other brands like Stromer of Switzerland started in manual bicycles but are now identified by their electric bike products.

New technology, such as torque sensors from IDbike (Holland) and SMEV (USA), or controller and user interface technology from ASI (Canada) and advanced motor technology from Motor Excellence (USA) or Hoganas (Sweden) magnet less motors from HEVT (USA) and advanced Lithium technologies from OXIS Energy (UK) / Lishen Battery Company are all creating products that enable fast developing trends in ebikes.

1. More power – ebike riders in flat coastal cities and places like Holland find that 250 watts is enough. But larger people and hills quickly lead to demands by consumers for more power. This power can be in the form of more efficiency in converting energy to torque, as we find in advanced motors. Or it can be in the form of legislation that allows more powerful motors.
2. More speed – the “s-class” bikes, which look a lot like bicycles but are faster than the allowed speeds for EPACs and are homologated as type approval (light motorcycle) vehicles are gaining in popularity.
3. Electric motor scooters are gaining in popularity, quickly. The “Vespa” scooter is, perhaps, the most useful vehicle form ever invented. Technology and cost have converged to make affordable, practical scooters a reality.
4. Bicycle Brands are doing well with electric – but start ups and ebike specialists are finding opportunity in this new space. Ebikes are an incubator for great brands of the future.
5. User interface – the electronics and displays – are becoming the most attention getting part of ebikes, and potentially the most profitable. Interaction with GPS, mobile phones, battery and motor controllers is now found on many ebikes . The connected ebike” is just around the corner.

Not only are we making money and growing fast – electric bikes brought to the world by Taiwanese companies are also part of the badly needed tools that will save our environment.

With 7 billion humans living in ever more crowded cities, with less parking, and less roadway….electric bikes offer quiet, emission free, compact and practical transportation. Not to mention increasing cost of fuel, and increasing need to eliminate carbon emissions.

Electric Bikes are part of the solution, and the industry that gathers in Taipei should be proud of their contribution to improving lives for millions of people, and proud of the profits being earned!

The news from Iran is both good and bad for the electric bike industry. A lot depends on the timing and exactly what your company does, and when.

This tension promises higher prices for oil —  but also higher prices and supply constraints for ebikes, bicycles, motorcycles, batteries, and motors.

Consumers are very much affected by prices and make buying decisions accordingly. When the price of oil spiked in 2008, the ebike inventory of the USA and EU sold out immediately, and the concurrent shut down of paint and steel factories in the Beijing / Tianjin area that was ordered by the Chinese government to improve air quaintly for the 2008 Olympics meant that it was not possible to restock in a timely fashion. Then the world economy collapsed before the electric bike industry could really react.  But we can learn an important lesson from this.

If we consider the base issues between (This political tussle is NOT about Iran vs. USA, it is about Iranian nuclear weapon vs. much of the world – especially Europe.) Iran and most of the world, we can see that Iran will not stop working on a nuclear bomb, and we can see that Europe, Israel, Iraq (remember their long war between Iraq and Iran?) Saudi Arabia, and many others do not want to see Iran with such weapons. The oil embargo appears to be a valuable tool in slowing that down or stopping it, (as evidenced by the Iranian reaction) and Iranian complaints and threats are not going to stop it. Iran has prepared for decades to enforce threats to close the Straits. And most of the oil exporters, Persian Gulf nations, and the navies of the Western nations have prepared as well.

So we can predict that there will be trouble in the Strait of Hormuz, probably soon. Such a conflict will consist of Iranian missiles damaging or sinking tankers and allied naval vessels, with allied aircraft destroying Iranian missile sites and patrol / missile boats. It is
likely to be short lived but it is also likely to result in expensive losses for both the militaries and a few oil tankers.

And an interruption, perhaps a long one, in oil supplies moving through the strait. An Interruption in oil supply through that strait is going to restrict oil supplies to Asia, Japan, SE Asia, and to a lesser extent, other areas. That will cause the Asian market to increase what they will offer for oil, diverting supplies from other sources, and raising prices worldwide. Due to the large percentage of the world’s oil that will suddenly be unavailable, there will be shortages everywhere. It is likely that the price will reach $150 BBL and it is likely that the price of oil will never again be below 100 BBL. If the war in the Strait lasts more than a few days or couple of weeks, it could cause oil to reach more than 200 BBL, as such a war would interrupt the distribution of nearly 20% of the worlds supply.

Electric vehicles are among the few industries in the world for which this is good news. But it is not an automatic good thing. Those that have inventory on hand will sell it quickly, but may have to pay a much higher price for new goods. New supplies may be delayed – remember that oil supply reduction to Asia will slow the Asian supply chain. And the cost of ocean freight will skyrocket the way it did in 2008, thus raising cost of goods sold. ompetition for supplies of bikes, components and materials will also raise the price, and slow the delivery.

Taking advantage successfully of this will depend to a great deal on the relationships in the supply chain. And on the sense of timing and hopefully, good luck.

Our suggestion is to make plans and arrangements with your suppliers now.

Edward Benjamin
eCycleElectric Consultants
Chairman, LEVA

By Edward Benjamin

A concern for any Bicycle Retailer is the legal status of electric bikes. Here is a guide: USA Federal Law states that electric bikes are governed by the CPSC (same as for manual bikes), and you can Google “electric bike CPSC” and find the relevant law quite easily.

That law states that if a bicycle is equipped with a motor of less than 750 watts and a functional manual pedal system, capable of no more than 20 MPH under power, it is a bicycle.

A key point is that the federal law states it is a bicycle. It does not state that it is a motorized bicycle. The intent and interpretation of that law is that electric bikes are treated like manual bikes.

This is a very good situation for ebikes, but often misunderstood.

It is possible for states, counties, municipalities, parks, and other jurisdictions to further restrict ebikes, and there are such cases. But they are rare.

So for most dealers, an ebike has the same regulatory situation as a manual bike. End of story.

But…many law enforcement officers do not know this. They see an ebike that looks a lot like a motor scooter, and they are not interested in seeing the rider’s copy of the CPSC regulations. Officers normally refer to their Officers Handbook (or whatever is the local version) and many such handbooks are silent on the relatively new electric bike.

And there are a lot of non-compliant ebikes.

Many Chinese made electric bikes used in China have no pedals (sometimes you can see the cutouts in the plastic where a crank spindle might be installed – thus making it a “bicycle”.) Others have motors that are more powerful or top speeds that are higher than allowed.

Some of the common Chinese ebikes do not have CPSC compliant reflectors or frame testing. Others may not have an owner’s manual or the correct box and other labeling.

Responsible dealers should consider these steps:

1. Buy from a responsible distributor that has complied with the CPSC requirements, has a good manual, and liability insurance.

2. Research your local laws; be sure you are telling your customers the same thing your local authorities will tell them.

3. Be interactive with law enforcement. A visit to the appropriate officer at HQ might result in a memo issued that will clarify to the officers in the field the status of ebikes.

4. Be wary of ebikes that look like motor scooters. These are often misunderstood.

5. And finally…inform your customers before they buy and when you deliver their new bike.

Ebike riders are often NOT cyclists. The more you can tell them about the local cycling  environment including regulations and bike paths, the better.

Ebikes are an opportunity to greatly expand your market and margins. Enjoy selling the easiest to pedal bikes in history, and the profits that come with them.

The Ebike Trend for 2011

October 26, 2011

By Edward Benjamin

Chairman, Light Electric Vehicle Association

Managing Director, eCE Consultants

The trend for 2011 ebikes is very simple: They
are selling. And the dealers who sell them are making money.

The LEVA (Light Electric Vehicle Association)
says there are more than 420 specialty retailers selling electric bikes now.
Some of these are bicycle dealers, but others are specialists in electric
bikes. And that is not counting the mass merchants – who would add several
hundred more locations.

There are more than 30 brands of electric bikes
offered in the USA, and they come from companies ranging from tiny, new,
importers to major bicycle brands to well established ebike specialists.

The range of product is wide. From $400 dollar
bikes that are surprisingly good, to superb (by any standard) machines selling
for more than $3,000. The average is now about 1300-1600 dollars.

The size of the ticket and the margin on the
average ebike sale is larger than the average manual bike. And ebikes are
ridden more miles, on the average, thus requiring more service, tires, etc.

And today’s ebikes are better in every respect,
technically, comfort, ease of use and maintenance than those of the past. Many
of them even climb hills with vigor.

As articulated by Mike Wolf in his excellent
primer on electric bike sales for the IBD (http://www.levassociation.com/wolf-article),
a dealer needs to be committed. Putting a toe in the water is not going to
work.

Staff training is key, both for the sales team
and mechanics. Ebikes are more complex machines, and the customer is both
different and the same.

Your sales staff needs to be able to talk to the
largest and most affluent group in America – aging baby boomers who are not in
great shape.  The ebike extends their
life long enjoyment of bicycles and the outdoors. (USA baby boomers have been
the best customers in world history for high end bikes, but gravity has been turned
up, and somehow we all got fat. Electric makes gravity and age much less
annoying.)

Your mechanics will need to learn to identify
and repair electrical propulsion system problems – which is actually easier
than mastering the mechanical issues they are already expert at. The LEVA can
help. Seminars on technical subjects and ebike service will be held at
Interbike this year.

Choosing your suppliers carefully is a must. You
need suppliers who offer a good product, training for your staff, good warranties
and the parts to support you.

And here are some observations that may help:

Lifelong cyclists – the sort that are your
customers now, are used to pedaling, and used to controlling the bike through
that effort. They tend to like pedelecs (the motor is controlled by a torque
sensor on the pedals). And the major bike brands are mostly offering pedelecs.

Commuters and first time buyers of ebikes tend
to prefer to control their bike with a throttle – which USA law allows and
describes many bikes.

Generic “Chinese” ebikes are usually inadequate
for the USA market in some respect – too small, not powerful, poor durability,
or not in full compliance with CPSC. Better to buy the bikes intended for the
USA market from USA focused suppliers. (Which are usually made in China!)

Consumers tend to demand more battery (range)
than they will ever use. Answer questions about range with a question of your
own: “How far do you normally ride?” and you will find that your ebikes are
almost always suitable.

Upon closing the sale, allow extra time and
attention to instructing the consumer in how to use and care for their new
bike. While they may know a lot about taking care of a manual bike, chances are
they know nothing about taking care of an ebike. Don’t forget to add on a
helmet, rain gear, lock, and…extra charger (Keep one at work, one at home).

And enjoy the extra profits of this new and fun
product.

With all of the difficulties in the world today, it is a pretty nice job to be selling bicycles. By doing so, we are providing tools that are part of the solution needed for so many parts of life, for most of the world.

Bicycles help with population density, traffic congestion, parking congestion, air pollution, physical fitness, personal responsible behavior towards the environment, and they save money and increase one’s personal time and quality of life. (And they are great fun, as well as great sport.)
Electric Bikes expand this to a wider group of users, increase the user’s range, and make the bicycle experience more comfortable. Even better, many people, world wide, which have little interest in physical fitness or environmental responsibility, find electric bikes are practical and cost effective transportation.

European retailers and brands have been a bit startled by the rapid growth of pedelec sales. And delighted by the extra profits to be made.
The success of the EU market for pedelecs – high quality bikes at high prices – has been an important balance for the success of the Chinese market –lower performance bikes at low prices. Any observer of the two markets learns that there is a sizeable niche for both sorts of ebikes.

China led the way by creating laws and regulations that required electric bikes, and then developing suitable product at low prices. European leadership has expanded and improved the products and established that they should be, and can be high quality, high performance and high priced. EU standards and attention to the details have greatly improved the ebike experience for the entire world market. (There are even proposals that China domestic bikes should meet EU requirements, as a matter of Chinese regulation.)

Today, many new markets are opening up, world wide, for electric bikes. India, Turkey, Brazil, SE Asia, and even the USA are growing rapidly. Each has some special requirements – such as extreme ruggedness for Indian units.

The companies involved include so many highly respected brands of auto makers, motorcycle companies, auto parts makers, bicycle brands, bicycle component makers, and specialists in electric bikes and components. There is not room on this page to list them all.

But electric bikes have, in a way, only just begun. For most markets, world wide, the consumers are just now aware that electric bikes offer benefits to them. And in many ways, the electric bike product of today is only recently truly reliable, sophisticated, and durable. Compared to manual bikes, or autos, electric bikes are a very young product. I compare the current ebike industry to the smart phone industry of 2002 – just beginning, despite a decade of development.

As successful as we are today (31 million units expected in 2011, world wide), we face a much larger future market.

So here is my prediction for the world markets: Half of all bicycles sold world wide, will become electric bikes. More powerful electric bikes (S-Class and more) will replace all mopeds and many light motorcycles. Electric scooters, using very similar technology to the electric bike will replace gasoline scooters, worldwide. The result: Something like 115 – 130 million units per year, worldwide.

by Ed Benjamin, founder of the Light Electric Vehicle Association and managing partner of eCycleElectric

By Ed Benjamin, LEVA chairman and managing director of eCycleElectric Consultants

I was a bike racer, then a bike shop owner, then owner of 4 stores. Now I call myself a recovering retailer, and pay respects to those still in the fray.

Somehow, I became a pretty average baby boomer. I have grandkids, a pickup truck (!), gray hair, and a belly. I am one of the old fat guys that I used to deride.

Have you noticed that there are a lot of old fat guys (and gals)? Baby boomers have been the largest buyers of high-end bikes in human history.

You may not be seeing us in your bike shop. We still enjoy cycling, except that gravity went up and our wind went away. And our shoelaces are hard to see now.

But there are some bikes that are particularly attractive to our situation.

Most consumers regard the electric bike as more useful, and valuable than a pedal bike. Note that I said “most consumers.” Most consumers do not shop in bike shops. And that is a problem. And it is an opportunity – for electric bikes are attractive to a lot of people you don’t attract now.

Ebikes can expand your market, at a higher margin, and a larger ticket.

Every time the bicycle has become easier to pedal, or more comfortable, bike sales have boomed.
Now we can offer the easiest to pedal, most advanced bikes in history at the moment that both gravity and gasoline prices are ratcheting upward.

Gas prices are good news for bike dealers. Because America has a transportation cost problem, and we have part of the answer.

Buying bikes is one of the ways Americans react to fuel prices. The 70’s bike boom was part gas price, and part lines at the pump. But in the 70’s America was much younger. The bike buyer of 1972 is an electric bike buyer in 2011.

In 2008, fuel prices emptied all distribution of the few ebikes that were on hand. Constricted supplies from China (2008 Olympics shut down many factories) meant no quick resupply. And the period of high price was short.

This time, the period of high price is likely to be long. The turmoil in the mid east, combined with expanding use of autos and energy world wide…

Anecdotal reports say USA retailers are reporting strong increase in sales of ebikes. Sierra Magazine says 12% of their readers plan to buy an ebike. Amazon says sales of ebikes up 6000%! My customers (I help importers and bike brands with developing and buying electric bikes) are busy, and nearly frantic to increase their orders. And this is not just happening in America.

Did you know that in Holland 1 in 4 bikes sold is electric? In Germany it is 1 in 8, in Switzerland, 1 in 10. And climbing. Bike dealers and brands in Europe say that their profits come from electric bikes. About 1.1 million ebikes, most of them above 1300 Euros were sold in Europe last year.

That is up from about 200,000 only 6 years ago.

There are about 119 million ebikes in service today, world wide. About 31 million were sold last year. That makes ebikes more than 20% of the world bicycle market, and far and away the largest dollar value.

I suggest that it is time for American IBDs to take part in this. There are many excellent bikes now, from reputable brands.

Greetings.

This is the first posting of a blog that will be focused on the industry and promotion of LEVs.

We are involved in a very international business, and I am writing from a hotel room in Ningbo, China. Next week I will be in Barcelona, Spain, for the EV Battery Forum.

In the last few weeks, I have attended the Taipei Cycle Show, and visited new companies getting involved in LEVs in Taiwan, China, and South Korea.

The interest, scale of investment, and energy being focused on the LEV industry is invigorating. As is the knowledge that we are rapidly becoming a truly major industry, and that our product is one of the tools that will help the world with the environment, personal transportation for many people in many places, traffic and parking congestion, and reducing the need for fossil fuels.

Ed Benjamin, Chairman, LEVA