Rad Power Bikes may close soon

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Its

SoCal is crawling with Rads, too. I see more school kids than adults on them, but parents hauling young kids on Rad cargo bikes are a pretty common sight. A very popular choice for surfboard transport as well. The vast majority here have 20" wheels with 3" or wider tires.

Guessing a good half of the many, many ebikes I see out and about here are Rads. With that kind of market penetration, hard to understand what went wrong. Did product liability suits play a significant role?

It's the same story for most of the bike industry woes- spending a fortune on bikes to supply the huge demand during covid, then fighting lack of supply issues as China shut down, then getting hit by a sudden drop in supply in '22 yet by then having a huge over-inventory they can't sell, (costing a fortune), which they still can't sell- this is still an issue in the start of 2026 for a lot of bike brands as demand has not recovered to pre covid levels. Boom & Bust economics.

The start ups seem to have been hit hardest, partly because all their materials come ready made from China and lack of experience of older more cynical 'seen it all' bike biz companies (The bike industry is basically a long line of boom and bust cycles) meant they all thought the huge demand for e bikes was this new industry coming of age and high demand would continue forever.

Rad were caught in this trap, but also, the 'non traditional cycling customer' they fostered and made them big sales, post covid these customers could access the reemergence of Chinese bikes and parts- RAD are now competing with many similar Chinese bikes, most probably made in the same factories where the RAD stock comes from and being undercut. Like a lot of start ups, the rest of industry caught up.

So all their cash reserves is locked up in warehouses full of bikes nobody wants, sales are way down, and they are being superseded by newer bikes. Finally with so much product coming from China being prime target for tariffs, that's probably been the final straw.

 

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PON has very deep pockets, so they wont end up as some other pure bike brand owners. PON is indeed struggling like the other bike OEM's, so they are slimlining the brands and product ranges (like most, I see it daily around me). When CSG was still owned by Dorel there was a significant overlap in the portfolio and although they did sell out some patented stuff to their suppliers (.....) they had to reduce the product lines when they where bought by PON.bike. And if you look closely you would see that some of te PON.bike brands use the same frame molds, wheels are no longer special, hiw many Lefties are actually still used and other things get more in line with the rest of the portfolio.

You can see the same wiht other big OEM's, Trek is abandoning the Trek brand for the urban line for the (E-)bikes build at Diamant, Accell is streamlining their ranges and adopt a more car like platform idea and reducing the overall manufacturing locations, Belgian brands are also growing closer in their line up. Flyer for example is also fully suckt into the main factory of their new owners.

So for this moment less innovation, more platform based products and still stress on the ebitda of the OEM's. And indeed I hear a lot of old co-workers from past employers and current who are seeking their adventures outside of the bike-biz

Very interesting. And depressing.

As I said above, well regarded Scottish clothing brand Endura have suffered like your PON brand examples. Just this week massive lay offs in Scotland and entire company pulled from Scotland to the London HQ of their owners, in effect they'll be lumped in and managed together with all the other outdoor brands, the clothes made in same Asian factories as the other brands, any Scottish Endura uniqueness gone, corners cut, all the same, just to survive. Painful.

 

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This is from The Rise and Fall of Rad Power bikes on Geekwire, link below:

Step on the gas

Rad raised more than $300 million from investors in 2021, doubled headcount to more than 600 employees, and bet big on sustained demand.
But like many other businesses during the pandemic, Rad dealt with supply chain delays and disruption. The company went to great lengths to meet demand — in mid-2021, it bought 64 containers and chartered its cargo from Asia into a non-traditional port near Seattle.
Bike companies over-ordered on long lead times assuming COVID demand would keep going, according to Pluth. But he said the surge slowed dramatically by the summer of 2022.
“Prices were driven down, margins were driven down,” Pluth said. “Rad was affected — everybody was.”
As the pandemic demand settled, Rad was saddled with hundreds of millions of dollars of inventory.
“We just had too much inventory liability that we couldn’t be flexible,” said Leah Hunkins, a former supply chain leader at Rad. “It’s like walking around with a bowling ball around our ankles and going for a run — you can’t move.”
Pluth stressed that selling bikes below cost to clear inventory can be problematic.
“The more you sell, the more money you’re losing,” he said. “You’re in between this double-whammy of lower demand and a lot of product in stock. The other companies were able to work through that, given they have a lot longer track record and more diversified product. I’m just not sure Rad was able to do that.”

The rise and fall of Rad Power Bikes: From breakout success to the brink of shutdown

Rad started as a scrappy hardware startup and grew into the largest e-bike seller in North America. But a series of missteps and macroeconomic challenges led to more than seven rounds of layoffs and a remarkable downfall.

www.geekwire.com