Ebike market crowded....shakeout imminent?

[Gogogordy]

A quick look at the “discussion by brand” forum on this very board, and it’s 150+ subforums by brand says one thing: a large majority of those brands will ultimately have to go away.

Even if the market appetite for this emerging segment “ebikes” was any order of magnitude healthier than it presently is, or will be any time soon there are simply too many “brands” to pick from, and it’s my contention that (as is usual in any capitialistic free enterprise system) the weak will perish leaving fewer brands to pick from. The market cannot adequately allow so many firms, offering like product to prosper.

In short....there are too many choices....some have to go. It’s a fact of business.

So, my question to for the sake of discussion is this: If forced to predict, which brands do you anticipate will still be viable, and among the top 5 of the entirety of ebike brands in say 5 years, and why? (Innovation? A pre-ebike heritage? Etc.) Discuss....

 

[Barry S]

The brands that were already in the non-ebike market before the surge in interest like Specialized, Raleigh, et cetera will be able to survive any fluctuations in consumer interest because it's not their bread and butter. I also think companies that can continue to deliver a quality ebike for under $2k will survive like Voltbike and Juiced Bikes. There are other newer companies with great products, but many of them are reverse engineering what's already out there and I think we'll see more of them dry up if demand slows down. As for the top-end ebikes, I think they serve a small niche market of consumers that aren't necessarily looking at the price tag. They're looking at the badge, paint color, design, et cetera and less of the nitty gritty specs. Hard to make a prediction on them.

 

[pxpaulx]

It is still a very new market, but the biggest known brands and those with large market share in Europe will be around for the Long haul. A few small brands from the US will likely continue to grow as well, rad, volt, biktrix, cross current come to mind. If the brand sub forum had like two posts they are too small to bother discussing! That probably covers eighty percent of the subs.

 

[Solom01]

Well if we're trying to predict how many companies will fail we also have to keep in mind that the cost of entry compared to many businesses is quite low. Basically most of these companies buy parts (frames, batteries, brakes and so forth) from large suppliers and slap them together to come up with a new product. There's very little true innovation or R & D with most companies. Some have better customer service, others better warranties, but that's about it so although many companies will fold I expect there will be tons more getting into the marketplace - unless, of course, eBikes turn out to be a fad in the US that are only used by a small number of customers in which case they may just slowly fade away like hoover boards or hula hoops.

 

[indianajo]

Reminds me of the middle days of the personal computer market. There was a big catalog sold at discount stores, computer shopper, with 300 brands and hundreds selling parts. Top were IBM, Compaq, HP, Dell, the ones painted like a spotted cow. Dell & HP survived. Disassembling some, Dell had production engineering that cut the cost of assembly. Like plastic wrappers for disk drives where the wrapper was put on in the orient, and the final assembly in the US, to order spec., involved snapping the wrapper in and inserting one plug.

 

[Dewey]

A quick look at the “discussion by brand” forum on this very board, and it’s 150+ subforums...which brands do you anticipate will still be viable, and among the top 5 of the entirety of ebike brands in say 5 years

This review site does not have sub-forums for every bike brand that has an electric model available to buy in the US/Canada, e.g. there are no sub-forums for Babboe, Bakfiets, Breezer, Electrobike, Ghost, Madsen, Opus, Rambo, Rungu, Wike, Zero, or smaller US frame builders, etc. The big 3 US bicycle brands Trek, Giant, and Specialized will still be selling ebikes in 5 years, Trek has been expanding their shop network recently. The biggest US ebike brand is Pedego and their store network providing local support and offerings targeted at an older, wealthier, leisure/recreational market mean they will probably still be #1 in 5 years. Niche producers will continue to thrive as long as there is interest in their products e.g. Zero specializes in high performance electric motorcycles, Rambo resells fat tire ebikes for the hunting market. Cargo ebikes and eBikeshare offer potential for growth in American cities provided urban bicycle infrastructure continues to be built and the pace of state and local ebike regulatory reform is maintained. I think internet sales will continue to be important for lower cost brands competing on price or catering to the DIY market, or for buyers who want to buy a used ebike or new from a discount wholesaler. For higher priced brands offering local support is important for buyers who value in-person test-rides/sales/warranty/maintenance work, the brands that succeed will be those that partner with ebike friendly local bike shops, or mobile mechanics like velofix, or retail chains that have regional or national distribution eg Prodecotech sold through Dicks sporting goods. The cost of ebike technology, motors and lithium batteries may continue to fall gradually excepting any revolutionary battery advance, but cost of doing business margins need to be met, and international trade or WTO decisions threaten to introduce new cost barriers - for example in Europe the EBMA has filed a complaint with the European Commission to introduce punitive tariff's to counter dumping of chinese ebikes in European countries, and of course the current US administration is making protectionist noises.

 

[Gogogordy]

Well if we're trying to predict how many companies will fail we also have to keep in mind that the cost of entry compared to many businesses is quite low. Basically most of these companies buy parts (frames, batteries, brakes and so forth) from large suppliers and slap them together to come up with a new product. There's very little true innovation or R & D with most companies. Some have better customer service, others better warranties, but that's about it so although many companies will fold I expect there will be tons more getting into the marketplace - unless, of course, eBikes turn out to be a fad in the US that are only used by a small number of customers in which case they may just slowly fade away like hoover boards or hula hoops.

Well, there are still things like warranty support costs, PLI, taxes and....salaries to factor in regardless of the threshold of entry into an industry may (or may not)
be. Those entrepreneurs have some kind of overhead to deal with each month in business, and of course have to make a living do so.

Remember I used the word "viable" in the question I posed...that in and of itself will narrow the field of likely survivors as things move forward.

The assumption that the cost to enter the e-bike market as a branded "manufacturer" is low actually buoys my argument IMO.

 

[Bryan Gurganus]

Agree with indianajo that it feels much like the personal computer market in the 90's. There are lots of brands and an industry of companies basically just assembling off-the-shelf parts and slapping their name on them without adding any real value or innovation. I think a few may survive but would imagine the most will eventually disappear. My guesses (which are worth exactly what you are paying for them) for the US market:

• traditional bike companies like Giant will have them but not emphasize them
• a few high end companies like Haibike and Stromer will survive as a successful niche
• a few mid-range companies that provide quality and value in the $1500-2500 range will take over as others fall away. This is the most interesting one to me and hardest to call. Easy Motion, Juiced, Magnum, IZIP, etc... Lots of good players in this space but too many to survive.
• plenty of low-end, poor quality will be around and but mostly fade away
• a few companies like Podeco will do well with low-to-mid range product through big retailers

 

[jazz]

This happens in all areas of newer technologies and one that is not easy to predict. If ebikes become more mainstream, the opposite might happen at first - you might see even more obscure lower/mid end ebike brands popping up everywhere in stores like Walmart, target though you can already see this happening on their online stores. Then as the mainstream market gets saturated, the herd starts to thin.

With the smaller companies, the ones that offer better value and superior customer service will survive. The bigger established brands who got in early, already have the budget to survive and the loyal customer base especially the brands which sell regular bikes in addition to ebikes.

 

[Barry S]

Another factor that will have an impact on the success or demise of ebikes in the US is the regulation of their use by local governments. The US ebike market is going to have a difficult time growing if the anti-ebike groups keep banging their drums the loudest at town hall meetings in front of government officials that haven't been on any kind of bike since childhood. We need to take the lead in educating the decision makers about ebikes and how they play a vital role in encouraging people to get out of their cars and try another form of environmentally cleaner transportation as well as help those who because of age or health conditions can't ride a conventional bike.

 

[Gogogordy]

Agree with indianajo that it feels much like the personal computer market in the 90's. There are lots of brands and an industry of companies basically just assembling off-the-shelf parts and slapping their name on them without adding any real value or innovation. I think a few may survive but would imagine the most will eventually disappear. My guesses (which are worth exactly what you are paying for them) for the US market:

• traditional bike companies like Giant will have them but not emphasize them
• a few high end companies like Haibike and Stromer will survive as a successful niche
• a few mid-range companies that provide quality and value in the $1500-2500 range will take over as others fall away. This is the most interesting one to me and hardest to call. Easy Motion, Juiced, Magnum, IZIP, etc... Lots of good players in this space but too many to survive.
• plenty of low-end, poor quality will be around and but mostly fade away
• a few companies like Podeco will do well with low-to-mid range product through big retailers

Agree wholeheartedly.

 

[Gogogordy]

Another factor that will have an impact on the success or demise of ebikes in the US is the regulation of their use by local governments. The US ebike market is going to have a difficult time growing if the anti-ebike groups keep banging their drums the loudest at town hall meetings in front of government officials that haven't been on any kind of bike since childhood. We need to take the lead in educating the decision makers about ebikes and how they play a vital role in encouraging people to get out of their cars and try another form of environmentally cleaner transportation as well as help those who because of age or health conditions can't ride a conventional bike.

Agree as well.

The other influencing factor, at least in in the US, is bridging the gap (interest-wise) between the avid cyclists, many of whom would never even consider an electrically assisted bike, and those who dont ride at all, and probably never will. Need a major market in the middle of those polar opposites and of course accesability to friendly bike paths, and favorable rules to promote not only the survival of the ebike business, but any sustainable, negligible growth.

Sidebar: I live in car-crazy inland Southern California. I have neighbors who get into their cars and drive a few homes away to their neighbors’ homes, to the community pool....a five minute walk, and even to the cluster mailboxes a few hundred feet from their residences! Seriously.
This behavior isn’t going to support hundreds of different ebike brands....

 

[Deacon Blues]

traditional bike companies like Giant will have them but not emphasize them

I think the opposite will happen. As the ebike market grows the large bike companies become more and more involved, spend more money on R & D, and produce more ebikes.

It's economics-if there is an ever growing market and there is money to be made, the big bike companies will participate, in a big way.

 

[Barry S]

Agree as well.

The other influencing factor, at least in in the US, is bridging the gap (interest-wise) between the avid cyclists, many of whom would never even consider an electrically assisted bike, and those who dont ride at all, and probably never will. Need a major market in the middle of those polar opposites and of course accesability to friendly bike paths, and favorable rules to promote not only the survival of the ebike business, but any sustainable, negligible growth.

Sidebar: I live in car-crazy inland Southern California. I have neighbors who get into their cars and drive a few homes away to their neighbors’ homes, to the community pool....a five minute walk, and even to the cluster mailboxes a few hundred feet from their residences! Seriously.
This behavior isn’t going to support hundreds of different ebike brands....

I hear ya. We're a one-car family and my wife keeps it to take my daughter to school (monthly fee to ride school bus in Honolulu) and take her parents to doctor appointments, run errands, etc. I can either take the city bus to/from work or bike. The drive to my office is only 8.25 miles via bus routes and it takes 3 buses to get there. Minimum travel time is 75 minutes due to waiting between buses. I take the same route on my bike in 40 minutes and I don't have to share the seat with anyone or stand.

 

[emco5]

....As the ebike market grows the large bike companies become more and more involved, spend more money on R & D, and produce more ebikes.

It's economics-if there is an ever growing market and there is money to be made, the big bike companies will participate, in a big way.

That is how I see the eBike market evolving. The large bicycle companies are sitting back and watching the proceedings. Trek, for example, who is a major player in the bicycle game, currently has 14 eBike flavors in their line. They have the engineering and manufacturing resources, and in-place dealer network, to make a big statement whenever they want to. When that happens the smallest eBike companies who construct "me too" bikes from the generic parts bins will just evaporate. As I've mentioned before, motorcycle manufacturers are also observing. Yamaha and Piaggio are making moves now. If Honda steps up it's all going to get serious.

 

[Gogogordy]

That is how I see the eBike market evolving. The large bicycle companies are sitting back and watching the proceedings. Trek, for example, who is a major player in the bicycle game, currently has 14 eBike flavors in their line. They have the engineering and manufacturing resources, and in-place dealer network, to make a big statement whenever they want to. When that happens the smallest eBike companies who construct "me too" bikes from the generic parts bins will just evaporate. As I've mentioned before, motorcycle manufacturers are also observing. Yamaha and Piaggio are making moves now. If Honda steps up it's all going to get serious.

Indeed. Piaggio and Yamaha are actively entering the market, possibly bringing along some additional “cred” to the whole ebike thing (Yamaha more so for a more broadly recognized name here)

Unfortunately, in the US anyway, even motorcycle sales are super sluggish...since most Americans consider and consume motorcycles and PTW’s more as toys than viable transportation options. Im thinking ebikes, by many peoples perceptions will fall under that same umbrella, and more so when badged with brand names that are perceived as makers of big-boy’s toys.

Glass half full? Glass half empty? Time will tell.

 

[Nutella]

Agree with indianajo that it feels much like the personal computer market in the 90's. There are lots of brands and an industry of companies basically just assembling off-the-shelf parts and slapping their name on them without adding any real value or innovation. I think a few may survive but would imagine the most will eventually disappear. My guesses (which are worth exactly what you are paying for them) for the US market:

• traditional bike companies like Giant will have them but not emphasize them
• a few high end companies like Haibike and Stromer will survive as a successful niche
• a few mid-range companies that provide quality and value in the $1500-2500 range will take over as others fall away. This is the most interesting one to me and hardest to call. Easy Motion, Juiced, Magnum, IZIP, etc... Lots of good players in this space but too many to survive.
• plenty of low-end, poor quality will be around and but mostly fade away
• a few companies like Podeco will do well with low-to-mid range product through big retailers

I think you're right on, at least in the US.

 

[bob armani]

Agree as well.

The other influencing factor, at least in in the US, is bridging the gap (interest-wise) between the avid cyclists, many of whom would never even consider an electrically assisted bike, and those who dont ride at all, and probably never will. Need a major market in the middle of those polar opposites and of course accesability to friendly bike paths, and favorable rules to promote not only the survival of the ebike business, but any sustainable, negligible growth.

Sidebar: I live in car-crazy inland Southern California. I have neighbors who get into their cars and drive a few homes away to their neighbors’ homes, to the community pool....a five minute walk, and even to the cluster mailboxes a few hundred feet from their residences! Seriously.
This behavior isn’t going to support hundreds of different ebike brands....

LMAO-Seriously -They drive their cars just a few hundred feet away? That is crazy!! Sounds like the same people that are probably using Instacart grocery delivery services instead of doing their shopping themselves (and fully capable). Perhaps the first drive-thru restaurant was born in the same area LOL!!

 

[Gogogordy]

LMAO-Seriously -They drive their cars just a few hundred feet away? That is crazy!! Sounds like the same people that are probably using Instacart grocery delivery services instead of doing their shopping themselves (and fully capable). Perhaps the first drive-thru restaurant was born in the same area LOL!!

I know, right?

Well, we ARE the fast food capital of the world here in So-Cal, but admittedly most fast food isn’t so fast anymore cars long. Then there’s the Starbucks drive thru....

 

[Mr. Coffee]

I think in the end, for most e-bike brands, they will survive or not based on how extensive a distribution channel and dealer network they can build. That is why the big existing bike players (e.g. Trek, Giant, Specialized, &c) will always have at least a toehold.

On the other hand, if you look at the regular bicycle world there are an amazing number of boutique manufacturers, especially for high-end bikes. Also a lot of players with a local or regional presence but pretty much unknown outside of there locality. A good example is co-motion.com

Honestly a similar dynamic happens with mountaineering and backpacking gear. There are a lot of big conglomerates but there are also a great many small players who are more specialized.