An Excellent Rundown on Present Bike Industry Situation

[Deleted member 4210]

I recently visited a bike shop (about 60km from where I live) that only sells ebikes. They were in the process of unloading R&M and Moustache bikes from a large trailer and the bike store was already chalk-full of new bikes.
The owner told me he wasn't having any problem ordering new bikes from Europe.

Well pricey ebikes like R&M, certainly don't have the audience as large as the brands who's customers are only willing to spend less than $3000, on an ebike. What's the least expensive R&M model again ? Or Moustache ? Those should be much easier to come by than all the ebikes that are priced well below those, and in some cases are out of stock until 2021. I especially love the name of one R&M model, their 'Super Delite.' Perhaps the hidden meaning of the moniker is that R&M would be SUPER DELIGHTED to sell you that model, and have you drop at least $8200 for one of them ? Don't have to sell many of those to make some pretty decent coin.

 

[phoenixtoohot]

Really ? Just one example brand, Aventon is pretty small compared to Trek and I've been able to get plenty of ebikes all season and they are cranking them out now no problemo. Whereas Trek told their dealers mid summer, that if you don't have any ebikes on your sales floor, you aren't getting any more until April 2021. This was verified by two different customers in the past two months who tried to buy at a local Trek store, came away empty handed but said they were happier to have found my shop and a great selection of 12 brands and over 150 ebikes in stock. A lot of which are Aventon.

Mike, how did/does Aventon keep bikes in supply?

 

[Deleted member 4210]

Mike, how did/does Aventon keep bikes in supply?

Unlike Rad,Pedego,Ride1up, Biktrix,Magnum, even Trek, and nearly 80% of the rest of the ebike industry, Aventon owns their factory. Their CEO is 3rd generation manufacturing owner in his family. So they get to make their own management decisions on how to deal with China's widely varying, and often inconsistent or onerous Covid protocols, choose their components/parts suppliers or rapidly change/negotiate as needed, control ramp up time, control any rapid expansion, control number of shifts and how to deploy people safely during Covid, how to better manage a 600% increase in sales, without ANY of the interference of a 3rd party owned factory under which a EBike brand is merely contracting with, and that quite often is shared manufacturing space for multiple brands where they each have to 'wait their turn' for their batched production run, and that 3rd party factory is one that serves multiple 'masters' with often conflicting priorities, which also greatly decreases nimbleness, decreases ability to quickly change component/parts suppliers if needed, or to find suppliers to replace any that went belly up during covid.

3rd party factories can have volume leverage in terms of price, but they get slaughtered in a situation like this, because they are trying to buy as many of the same components as they can for multiple brands, and that greatly inhibits nimbleness, and requires 'buy in' on any spec changes from multiple brands if something goes awry in their supply chain. Those factories may be good for high volume, that is slow but steadily growing, with well planned ahead quota's that are months in the making and easily coordinated when there is a lot of time, often based on year ahead commitments from each brand they build for, and so they are ok for slightly increasing year over year output increases. But they become like LARGE elephant herds walking, very slow to change or adapt, with these big 'bureaucratic' proverbial lead anchors chained around their production neck (i.e. serving multiple 'masters' where decisions need to be 'consensus' from disparate parties), which then creates massive bottle necks when suddenly they get into rapidly needed ebike demand changes, or even when smaller suppliers (this industry is littered with them) suddenly disappearing into thin air, due to bankruptcy, too many sick employees that dont show up in a covid hot spot at any one given supplier, and then dealing with local government forced shutdowns due to covid lockdowns that may be occurring in multiple government zones across china, and that can vary greatly.

Whereas being one company, and owning the process from top to bottom, you can be far more entreprenurial and quicker to respond far more rapidly to drastically changing market and supplier conditions, as Aventon proved out this year in spades.

 

[phoenixtoohot]

But they become like LARGE elephant herds walking, very slow to change or adapt, with these big 'bureaucratic' proverbial lead anchors chained around their production neck (

Good description Mike.

 

[Deleted member 4210]

Good description Mike.

The other unmentioned part is China's inherent layers of middle men, at every supply chain level. It's mind boggling to an outsider. Works fine when things are high volume and slow to change and steady. During a Covid 19 situation, it all quickly devolves to chaos. You won't know the fall out of this right away, but many ebike brands got hurt bad this year, going months without any product in the heart of the season, and so they had to resort to extremely costly pre-order discounts to hold people off for months while they waited for ebikes to come in, and they got hurt worse if they were D2C on line firms, since they were in very desperate need of cashflow every week. But had no product to deliver for months. I wont name names, but it was hugely obvious, and I probably could have a 75% chance of nailing who wont be around in 2021. People will be shocked by this thinking demand was so huge, that every brand should have had a great year. Not so, I'm afraid.

 

[phoenixtoohot]

I wont name names, but it was hugely obvious, and I probably could have a 75% chance of nailing who wont be around in 2021

Drat, I would like to hear who they are.

 

[Deleted member 4210]

For 2021, I would not be surprised to see 'price creep', or 'value engineering' , or 'decontenting' of ebikes (if ebike firms are reluctant to raise prices on certain best selling models so as to not loose market share or due to severe shortages of some parts from key component brands like Shimano) after what's transpired with the extraordinary increase in overall bike and ebike demand and the severe stress that Covid 19 has put on the entire bike component and ebike supply chain.

 

[BigNerd]

I’ve spent the last 6 months or so shopping for both ebikes and regular bikes and I think it just depends on what you are looking for.

Both Trek and Specialized seem to have a decent supply of bikes at brand specific LBS. The interesting thing is that actual brand owned stores have less than the LBS chains that carry multiple vendors.

I was at Jax Bicycles, and they had boxes of Trek bikes stacked in the middle of the store. I was surprisingly able to buy a 2021 analog bike of the 2020 version I have been looking for.

I regularly see ebikes in stock that are in the $1800+ range. I have an ebike-only store near me and they always have stock (and yes, based on the empty boxes I see outside his store, Aventon is his biggest seller).

Maybe there is some slow catch-up going on here and while demand in other parts of the US might be slowing due to weather, that might be helping the supply in other areas of the country that have strong bike sales year round.

Targets and Walmarts are still empty... but I’ll see bikes show up there once in a while.

And yes, this is not scientific. My sample size is about 10+ LBS near me but that’s what I see.

 

[jim6b]

How strong is the bike market in China, India, east Asia overall?

Should this be factored into the equation.

 

[Art Deco]

For 2021, I would not be surprised to see 'price creep', or 'value engineering' , or 'decontenting' of ebikes (if ebike firms are reluctant to raise prices on certain best selling models so as to not loose market share or due to severe shortages of some parts from key component brands like Shimano) after what's transpired with the extraordinary increase in overall bike and ebike demand and the severe stress that Covid 19 has put on the entire bike component and ebike supply chain.

Seems that the big three or four will be unable to raise their prices, so component quality may have to drop, If they can even deliver enough bikes for Christmas ...

 

[Taylor57]

How strong is the bike market in China, India, east Asia overall?

Should this be factored into the equation.

With 200 million ebikes in China alone, I would say, very strong

 

[reed scott]

Seems that the big three or four will be unable to raise their prices, so component quality may have to drop, If they can even deliver enough bikes for Christmas ...

Raise prices? How far can you go above absurd/rediculous ?

 

[Art Deco]

Supply and Demand. Think pandemic pricing. Or gouging.

 

[Art Deco]

"An ebike will get you through times of no money, better than money will get you through times of no ebikes" Apology to the FFFB.

 

[jim6b]

With 200 million ebikes in China alone, I would say, very strong

The reason I brought the ebike market in China and Asia into the discussion is because to some degree those bikes are available for export to the US/EU.

When China has enough production to support 200 million ebikes, then American internet distributors only need to out compete, i.e. provide Chinese producers a greater margin than they would get in the local market.

 

[Art Deco]

I think @Deleted Member 4210 made clear above it's not that easy when one factory is making parts for all competitiors, both local and export markets. The markets require different parts and specs, so jobs are scheduled to avoid set up time...

 

[Deleted member 4210]

Seems that the big three or four will be unable to raise their prices, so component quality may have to drop, If they can even deliver enough bikes for Christmas ...

Those " big 3 or 4" as you call them, are only " big" when it comes to non electric bikes. When the local Trek store a few miles from my shop only has 9 on the floor today as we speak, and has never had more than 15 and only started carrying ebikes about 2 years ago, they aren't anywhere close to being "big". Even at my highest demand point this season, when ebike suppliers were trying to catch up, I never had less than 40 ebikes on the floor, or less than 60 in my total inventory. And there are shops across the US far bigger than my shop who don't carry anyone of the " big 3 or 4" brands. In fact I don't think those brands are really relevant in describing today's ebike market health or growth, or using their sales numbers to get a pulse on the industry. Rad's numbers would be far more indicative, as would firms like Pedego, Magnum, Aventon, or even Sondors.

 

[Art Deco]

Those " big 3 or 4" as you call them, are only " big" when it comes to non electric bikes. When the local Trek store a few miles from my shop only has 9 on the floor today as we speak, and has never had more than 15 and only started carrying ebikes about 2 years ago, they aren't anywhere close to being "big". Even at my highest demand point this season, when ebike suppliers were trying to catch up, I never had less than 40 ebikes on the floor, or less than 60 in my total inventory. And there are shops across the US far bigger than my shop who don't carry anyone of the " big 3 or 4" brands. In fact I don't think those brands are really relevant in describing today's ebike market health or growth, or using their sales numbers to get a pulse on the industry. Rad's numbers would be far more indicative, as would firms like Pedego, Magnum, Aventon, or even Sondors.

A very good point about the big brands. Out in the boondocks here in PA, the shops seem to carry one of the major brands and a secondary brand, and stock hundreds of conventional bikes and just a few ebikes per shop. The two Trek shops seem to have much less inventory; dozens not hundreds of bikes in stock, but I was never in those shops before Covid.

Anything beyond those few brands means ordering online or driving several hours to a major city. It would be interesting to know the percentage of ebikes vs conventional bikes sold by the big brands. They may not really be selling many ebikes compared to their conventional lines.

 

[Deleted member 4210]

A very good point about the big brands. Out in the boondocks here in PA, the shops seem to carry one of the major brands and a secondary brand, and stock hundreds of conventional bikes and just a few ebikes per shop. The two Trek shops seem to have much less inventory; dozens not hundreds of bikes in stock, but I was never in those shops before Covid.

Anything beyond those few brands means ordering online or driving several hours to a major city. It would be interesting to know the percentage of ebikes vs conventional bikes sold by the big brands. They may not really be selling many ebikes compared to their conventional lines.

Well between 15 and 20 million regular bikes are sold each year in the US as of 2019 numbers, versus maybe 500k to 600K ebikes per year now in 2020. Supposedly, the 'Big 4' sell around 40 to 50% of that 15 to 20 million. I would be very shocked if the "Big 3 or 4" collectively sell more than 10% of the number of ebikes sold each year. Too, they are primarily selling ebike models that are mid-drive motor based, and with majority of their models priced over $3000, so they are not heavily pursuing the lower priced part of the ebike market ( although notably, Trek recently came out with an entry level Townie with a rather weak 250 watt hub motor - head slap , lol), similar to how these "Big 3 or 4" aren't generally pursuing the low end price points of the regular bicycle market. PS. (Trek, Giant, and Specialized are the so called "Big 3" but number "4" can bounce around from year to year as to who that may be)

The good news for the ebike category is that an estimated 80% of the US bike riding population has never ridden an ebike ever. As the technology continues to rapidly evolve, a potential bike rider, should be asking the question after riding an ebike, "why would I ever go back to riding a non-electric bike?", since a lot of ebikes are so easy to pedal without running the electric assist. An increasing number of my customers report they are riding their ebike in zero assist a lot of the time, to get their weekly regimen of exercise, and then only add in the assist when they really want it or need it. And even more are reporting they are starting out with e-assist most of the time, but then increasing their endurance and lowering the amount of assist they use over time, and definitely improving health while also reporting they are losing weight. They all say they ride much more than they ever did when or if they were regularly riding a regular bike before their ebike purchase.

The health part is what I love to hear the most about the increasing use of ebikes overall. Over the past 30 years,so much of our society has become all about being sedentary and sitting (whether its in front of your PC, now working from home, sitting in your car, sitting in your backyard on your super decked out patio or pool area), or on the couch using your Ipad or Iphone or even watching the good ole TV)

I'm hoping the use of e-bikes becomes a secular trend, and not just because I own an ebike shop, but because our societal costs of being out of shape, and continually sky-rocketing health care costs have become a national crisis. It affects us all immensely, as even if you are in great physical health, in some way whether directly or in-directly, societal health care IS affecting your life-style in a not insignificant way. (sorry, my enthusiasm for the immense impact that I believe e-bikes can have for everyone, individually and our society collectively, tends to move me onto these occasional tangents... I guess some would say its become my passion as I approach the age of 60...or my 'mid-life' crisis lol)

 

[Art Deco]

Well between 15 and 20 million regular bikes are sold each year in the US as of 2019 numbers, versus maybe 500k to 600K ebikes per year now in 2020. Supposedly, the 'Big 4' sell around 40 to 50% of that 15 to 20 million. I would be very shocked if the "Big 3 or 4" collectively sell more than 10% of the number of ebikes sold each year. Too, they are primarily selling ebike models that are mid-drive motor based, and with majority of their models priced over $3000, so they are not heavily pursuing the lower priced part of the ebike market ( although notably, Trek recently came out with an entry level Townie with a rather weak 250 watt hub motor - head slap , lol), similar to how these "Big 3 or 4" aren't generally pursuing the low end price points of the regular bicycle market. PS. (Trek, Giant, and Specialized are the so called "Big 3" but number "4" can bounce around from year to year as to who that may be)

The good news for the ebike category is that an estimated 80% of the US bike riding population has never ridden an ebike ever. As the technology continues to rapidly evolve, a potential bike rider, should be asking the question after riding an ebike, "why would I ever go back to riding a non-electric bike?", since a lot of ebikes are so easy to pedal without running the electric assist. An increasing number of my customers report they are riding their ebike in zero assist a lot of the time, to get their weekly regimen of exercise, and then only add in the assist when they really want it or need it. And even more are reporting they are starting out with e-assist most of the time, but then increasing their endurance and lowering the amount of assist they use over time, and definitely improving health while also reporting they are losing weight. They all say they ride much more than they ever did when or if they were regularly riding a regular bike before their ebike purchase.

The health part is what I love to hear the most about the increasing use of ebikes overall. Over the past 30 years,so much of our society has become all about being sedentary and sitting (whether its in front of your PC, now working from home, sitting in your car, sitting in your backyard on your super decked out patio or pool area), or on the couch using your Ipad or Iphone or even watching the good ole TV)

I'm hoping the use of e-bikes becomes a secular trend, and not just because I own an ebike shop, but because our societal costs of being out of shape, and continually sky-rocketing health care costs have become a national crisis. It affects us all immensely, as even if you are in great physical health, in some way whether directly or in-directly, societal health care IS affecting your life-style in a not insignificant way. (sorry, my enthusiasm for the immense impact that I believe e-bikes can have for everyone, individually and our society collectively, tends to move me onto these occasional tangents... I guess some would say its become my passion as I approach the age of 60...or my 'mid-life' crisis lol)

I actually test rode that 250w rear hub Townie along with a 500w rear hub Voltbike. Neither could climb a small hill, so I started testing the middrives I could find locally.

And I hear you about the health benefits, that's what got me involved with this forum, rather than the "1500 watts and a throttle" mini motorcycle mindset that seems common online. Anyway, off topic again.