Genze Electric Scooter at $3.7k: Proof That Ebikes Are Overpriced?

[Asher]

I came across the Genze scooter, which retails for $3,700, and checked out its specs:

1.6 kwh battery
1400 watts
LCD panel
...and all that hardware (232 lbs of it). Plus the shipping for it.

No doubt, I think it's decidedly inferior to an ebike for a litany of reasons (weight, range, access to bike infrastructure), but that's beside the point. You see far less hardware in ebikes, especially the batteries, and they cost as much or more.

Is it simply economies of scale? Relatedly, is it also because many ebikes are made to Euro standards, so the market for speed pedelecs is much smaller?

Sure, the scooter parts are mostly made en masse, but the same is true for most of the ebike parts (drivetrain, wheels, accessories).

I think eventually we'll get out of this chicken or the egg/ low prices and high volume production, with brands like Rad, Juiced and Volt offering much better value. But it's kind of disappointing how most of the industry is like this still. The companies best placed to do well-priced ebikes in volume - Giant, Trek, Specialized, et al, have basically said, nah, we want that 100-150% markup, often with parts that are nice but are more costly than they're worth.

 

[Dunbar]

I think the big boys (or perhaps some new Tesla-like entity) will figure out how to get efficiencies, and thus cost savings, through economies of scale. It’s still pretty early days for the ebike industry. There’s still a lot of low hanging fruit to improve upon.

 

[Ravi Kempaiah]

Why do we see so many crowd-funded bikes and brands?
Because there are lots of low-hanging fruits. Any company that can design/import quality bike for under $1500 and provide good customer service can be quite successful. Example: RadPower bikes. They sell bikes in huge numbers and they are expanding and the same is true for juiced.

Hub motor bikes are sold in millions in Asia and they will be around. The whole fad of mid-drive is just a small craze that is popping up in the US but the number of hub motor E-bikes sold compared to mid-drives are like 10:1.

Companies will charge what the customers are willing to pay. As simple as that. It's a failed opportunity for many US companies who were in the field well before these small companies like Sondors, Rad, Juiced,Volt etc but failed to capitalize on it.

In India, you can find these motorcycles everywhere. They are quite powerful and very reliable. There are approx 10 million or more of these in India and you can get one for $1350. That's right. Oversized disc brakes, heavy-duty wheels/tires, full suspension and lots of other features for $1350.

Battery prices are coming down drastically. These days, it is quite easy to find 48V,12Ah everywhere!
Few people in the industry will cry at the dwindling margins but those who are smart enough will move on...

 

[Asher]

Great insights Ravi. I guess people don't import those motorbikes because they are not approved for use here?

Also Gogoro seems to have a quality product and sells theirs for a similar price, around $1,300-$1,500.

Can't wait to see the industry evolve as players like Rad and Juiced force change , away from over-engineered underpowered bikes.

 

[Bruce Arnold]

Why do we see so many crowd-funded bikes and brands?
Because there are lots of low-hanging fruits. Any company that can design/import quality bike for under $1500 and provide good customer service can be quite successful. Example: RadPower bikes. They sell bikes in huge numbers and they are expanding and the same is true for juiced.

Hub motor bikes are sold in millions in Asia and they will be around. The whole fad of mid-drive is just a small craze that is popping up in the US but the number of hub motor E-bikes sold compared to mid-drives are like 10:1.

Companies will charge what the customers are willing to pay. As simple as that. It's a failed opportunity for many US companies who were in the field well before these small companies like Sondors, Rad, Juiced,Volt etc but failed to capitalize on it.

In India, you can find these motorcycles everywhere. They are quite powerful and very reliable. There are approx 10 million or more of these in India and you can get one for $1350. That's right. Oversized disc brakes, heavy-duty wheels/tires, full suspension and lots of other features for $1350.

Battery prices are coming down drastically. These days, it is quite easy to find 48V,12Ah everywhere!
Few people in the industry will cry at the dwindling margins but those who are smart enough will move on...

View attachment 22279

I'd buy a motorbike like that for $1350 any day of the week. Wow.

 

[Ravi Kempaiah]

I'd buy a motorbike like that for $1350 any day of the week. Wow.

Actually, Yamaha is doing really well in the South Asian market. One of their best selling motorbikes is R15 priced at $1750.

http://www.yamaha-motor-india.com/motorcycle-yzf-r15.html

When it comes to E-bikes, I wish there were options for a very reliable, decent performance bike for $1500. That's what majority of the market wants. Nobody cares about high-end components or 90Nm of torque. Most people just want to a reliable and decent performance bike. There is a huge market for that.

Brands like Rad, Juiced, Surface 604, Magnum are trying and it will be interesting to see how the market will be in 2020.

I distinctly remember the day when I was about to purchase Specialized Turbo back in 2013 but backed off. First gen Turbo was a 250W DD hub with 350Whr battery. It was priced at $5900 and I saw it on sale for $4999 and I thought what a great deal! Here we are in 2018, (750W motor and 1Kwhr) bikes can be had for half the price of original turbo.

 

[Nova Haibike]

It is not just e-bikes that expensive; regular bicycles can come with crazy price tags as well. Every one of the major manufacturers makes bikes that sell for $10K or more.

 

[Mr. Coffee]

I have to ask this question. You are a bike shop owner, and you can sell two models. One retails for $4000 and the other retails for $1500. Each takes approximately the same amount of square footage in your shop and each takes approximately the same number of hours to sell and each has the same markup rate. Which bike are you going to stock?

 

[irishnutter]

Mr Coffee - you may want to add another key inventory variable to your theoretical question - "days to turn" or what car dealers term "days on lot". What if the $4K bike on average takes 210 days to sell while the $1.5K bike takes 45 days? Inventory expenses can add up quickly and for most LBSs, I would guess that cash flow is important.

I suspect the answer to your question is that the best bike is the one offering the best overall value that the LBS owner is confident will sell quickly. It's like the Costco model. They have an incredible product selection organization that researches the sweet spot for any given product category, then purchases in sufficient quantity to drive their cost down (with perhaps an exclusive benefit they can pass along) and then prices it aggressively so that the inventory moves quickly thru their inventory. I'm not suggesting that your typical LBS could, or should, stock ebikes in quantity, but they need to find the sweet spot for ebikes in their particular market that they believe offer excellent value which they can turnover relatively quickly.

 

[irishnutter]

Why do we see so many crowd-funded bikes and brands?
Because there are lots of low-hanging fruits. Any company that can design/import quality bike for under $1500 and provide good customer service can be quite successful. Example: RadPower bikes. They sell bikes in huge numbers and they are expanding and the same is true for juiced.

Hub motor bikes are sold in millions in Asia and they will be around. The whole fad of mid-drive is just a small craze that is popping up in the US but the number of hub motor E-bikes sold compared to mid-drives are like 10:1.

Companies will charge what the customers are willing to pay. As simple as that. It's a failed opportunity for many US companies who were in the field well before these small companies like Sondors, Rad, Juiced,Volt etc but failed to capitalize on it.

In India, you can find these motorcycles everywhere. They are quite powerful and very reliable. There are approx 10 million or more of these in India and you can get one for $1350. That's right. Oversized disc brakes, heavy-duty wheels/tires, full suspension and lots of other features for $1350.

Battery prices are coming down drastically. These days, it is quite easy to find 48V,12Ah everywhere!
Few people in the industry will cry at the dwindling margins but those who are smart enough will move on...

View attachment 22279

Ravi, is this some kind of hybrid? Looks like a regular combustion engine although the "exhaust" looks more like warp drive nacelles.

 

[Asher]

Coffee, Irish piped in before I could, but agree with him and would go further.

The cheaper one. It will sell in much higher volume, and turn over faster. A relative bought a Surface 604 Rook bike at a store, a brand Ravi just mentioned as a value brand. She said the salesman said it was their top seller. It's a decent bike, and importantly, under $2k. And this is at a store that has much more expensive bikes available.

My local bike shop specializes in low-priced simple bikes. The owner said his best selling bike is a nice looking, complete city bike for ~$300, he can barely keep them in stock. Has it right in the front window (and his window is only a few feet wide). Go to grocery stores, and you'll find that they have the best prices on the stuff they turn over most - and usually what customers comparison price shop for. At an Asian store, produce is often cheap but milk is expensive, while with your "white bread" stores it's often the opposite.


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It will be very interesting to watch how cheap electric bikeshare, as it becomes prevalent after 2018, affects ebike sales. I think all segments are due for major growth, and ebikeshare will be a showroom for ebike ownership; but in percent terms, the speed pedelecs will become a much bigger fraction of retail ebike sales, while electric bikeshare makes low-end ebikes more moot. By 2020, we may even see velomobiles see mass production.

 

[Mr. Coffee]

I think you all are kind of missing my point.

Let's use a concrete example. Suppose that both the $4000 bike and the $1500 bike have 100 percent margins and both have a sales cost of $250. So the $4000 bike would make the shop a profit of $1750 and the $1500 bike would make the shop $500. And a $1000 bike would only make a profit of $250.

So sales would have to more than triple for the shop to make as much money selling $1500 bikes than $4000 bikes. Maybe it would and maybe it wouldn't. But it isn't immediately obvious to me that it would and I wouldn't bet my shop without doing more research. You certainly cannot blithely assume that such would be the case.

You certainly can have a business model built around selling $300 bikes. But if your business is selling $4000 bikes that business model likely won't work very well selling a less expensive bike.

It isn't a coincidence, in my opinion, that many of the companies offering lower-cost e-bikes sell direct and not through a bike shop.

Part of my thesis here is that I personally doubt that cost of a bike is the dominant factor in determining whether someone buys a bike. I personally suspect that larger factors are cultural perception ("bicycles are for kids", "I don't look good in lycra") and poor cycling infrastructure.

 

[Asher]

Costco sells $8 and $200 wines. Ebike shops near me probably do some of the most volume of any shop (SoCal), and they have a wide range, from Surface to Stromer. Don't know the numbers offhand, but I imagine sales volumes are far far higher for $30k cars than $90k cars. Though ebikes are less in absolute terms, so not quite the same. You certainly can sell high end items in the same place, but not with the typical upsell of high end, high markup boutique brands.

I think the problem is a combination of cost and perceived utility. $2000 is a lot to pay for a toy, but not for something that can partly or fully substitute for a car, or even a transit pass (~$100 a month). You don't really know which one the ebike will be until you've owned one.

That's also why I think ebikeshare could supercharge ebike sales, as they let people see how ebikes could fit into their lives at $2 a pop. Amazon has been selling electric kick scooters like hotcakes.

 

[Mr. Coffee]

Asher, if there isn't adequate bike infra and places where people can securely park their bikes it doesn't really matter what the cost of a bike is. Except for brave adventurers most people would totally freak out at the idea of riding any bike in city traffic, no matter the price of the bike.

Again, unless you have actually ran a business it is hard to explain how challenging it is to confront a change to your business model. Yes, it can be done and probably should. That doesn't mean it would be easy, simple, or that people won't fight it.

$2000 is a lot to pay for a toy

I'm sorry, there are lots of toys out there (e.g. snowmobiles, sailboats, pleasure boats, &c) that cost way, way more than $2000.