The price of eBikes is out of control

[xenon]

How is it that I can purchase a brand new Seadoo Spark for less money than a full suspension Haibike?

When you compare the two, there is a SIGNIFICANT difference in R&D as well as shipping costs. Bombardier is a massive company with huge overhead. The same cannot be said for Haibike.

The numbers just don't add up. There is WAY too much profit margin on eBikes...

 

[Mr. Coffee]

... There is WAY too much profit margin on eBikes...

Define "WAY too much profit margin", please.

When I manufactured and sold computer hardware in the 1990's, the rule of thumb was that you needed a five hundred percent markup just to break even. That may sound ridiculous but in practice the distribution channel took nearly all of profit margin.

I'll give a simple example: let's say you are selling a piece of hardware for a list price of $5000. In line with my rule of thumb the cost of goods sold would be approximately $1000. Sounds good? Well... The dealer has to make a substantial profit margin on the product to be motivated to sell the product. So probably the cost to the dealer is approximately $2500. Of course, we don't sell directly to the dealer, we sell to a distributor, who also needs to be motivated to sell the product. So we sell the hardware to the distributor for $1250. So that "profit margin" isn't nearly as fat as you perceive it to be.

If you are manufacturing any product that has to be sold by a dealer network that dealer network will devour your profit margins. And keep in mind if your dealer sells competing products, if everything else is equal they will sell the product that makes them the most money.

Outdoor gear, whether bikes, kayaks, or skis all run on similar profit margins and parameters. I am not saying this is good or bad. Just the way it is.

 

[xenon]

We are comparing two drastically different products that sell for roughly the same price.

I am pretty sure we can all agree that more R&D and overhead is required to produce a Seadoo when compared to a mountain bike. The Seadoo also does not use off the shelf parts like Haibike does (forks, shocks, motors, batteries, drivetrain, wheels, tires). Haibike or most all other bike brands make the frame. That's it.

 

[itsaulgoodman]

We are comparing two drastically different products that sell for roughly the same price.

I am pretty sure we can all agree that more R&D and overhead is required to produce a Seadoo when compared to a mountain bike. The Seadoo also does not use off the shelf parts like Haibike does (forks, shocks, motors, batteries, drivetrain, wheels, tires). Haibike or most all other bike brands make the frame. That's it.

I'll agree with that. I don't think there is really much "R&D" to do for a lot of these ebikes as well. The motors from Bosch, Yamaha, Brose are cookie cutter just put into your bike geometry. Even drive chain stuff is pick from existing product.

Stromer is really over the top (even with their recent price reduction), but at least they are doing stuff different and being innovative. Such as the integrated display / GPS Tracking and Immobilization features.

 

[Don12]

Pricing is high but there are some super bikes out there. That 's why in my other post I was saying it would be nice to lease these bikes for two years, return them and move on to another, just like a car lease. I cannot find a company who offers a lease on E-Bikes, what am I missing?

 

[rich c]

I guess you are looking at list pricing? You should never buy either one of the items you mention during the season when the dealer won't discount. I own two Haibikes, and have a total of $5400 in the two. I bought one in late November, the other was the previous year model in very early March. Of course you take the chance of not getting the model you want because it's sold out, but it's worked out very well for me.

 

[JohnT]

R&D might cost less when you buy off the shelf parts, but buying those parts usually costs more. I’d bet Seadoo does much higher volume than Haibike, allowing them to make a lower profit margin and still keep their doors open. Also, I’d guess that Seadoo dealers sell at a lower profit margin but make that up on service work. Ebikes need service, too, but not nearly as much as most ICE vehicles.

I don’t know whether Haibikes are overpriced, but if they are, all the new competition out there should force them to make a correction sooner rather than later. Time will tell.

 

[Over50]

How is it that I can purchase a brand new Seadoo Spark for less money than a full suspension Haibike?

When you compare the two, there is a SIGNIFICANT difference in R&D as well as shipping costs. Bombardier is a massive company with huge overhead. The same cannot be said for Haibike.

The numbers just don't add up. There is WAY too much profit margin on eBikes...

I think there are some economies of scale at play here too. BRP is a large company that manufactures/assembles in Mexico among other places. I bet across their product lines and brands, (ATVs, jet skis etc) that they are producing way more units than any individual e-bike manufacturer. I'm sure too, they share costs across some of their product lines whether manufacturing or distribution. I'm thinking the scale is just slightly different. So while yes, Bombardier has larger absolute cost/overhead, on a per unit basis I bet it might be smaller. Here's an article I read recently while not specifically about BRP, it mentions their Mexico manufacturing quite a bit:

https://www.bloomberg.com/news/feat...cturing-couldn-t-care-less-about-donald-trump

 

[elyhim]

You get what you pay for. If you go cheap you're going to be wondering why everyone else is loving their ebikes but not you.

 

[scrambler]

I think that Ebikes, like fancy mountain bikes are a luxury item, so they can charge a premium for it.

 

[xenon]

Very good points made in this thread. I really appreciate it.

The problem seems to be that these bike companies are just too small to get sales volume up in order to get their costs down. That's really too bad.

I do like how Bulls pooled together a bunch of dealers to fund the brand in order to get costs down. My next bike might just be a Bulls full suspension bike.

If anyone is aware of a high end full suspension mountain bike for less than Bulls, I am all ears!!!

 

[pxpaulx]

Pricing is high but there are some super bikes out there. That 's why in my other post I was saying it would be nice to lease these bikes for two years, return them and move on to another, just like a car lease. I cannot find a company who offers a lease on E-Bikes, what am I missing?

This just isn't going to happen. Bikes in general lose far to much value after initial sale to support such a model. If a dealer could resell at 60% of the original value like car dealers can they would... Some bike shops sell new at 60% of MSRP if you happen on a good sale or demo. It just doesn't work like that with the level of sales in the US. There is no used market to support a high second owner sale value.

 

[fxr3]

Try riding that rinky dink spark down the road with minimal pedal effort.
Or, better yet, start making ebikes.
or, a full size REAL sea doo cost more than any ebike made, a lot more.
or, who would buy a cheesy spark when a far superior stx15f only cost a few bucks more.
or, on a ebike you're breezing down the street going somewhere, even the best personal watercraft is nothing more than a jet propelled cork, dodging boat wakes, probably bored.
I've had more pleasure from my overpriced stromers than any harley or dirt bike I've ever had.
Not sure I can put a dollar amount on pleasure.
Old guy with a couple stromers and a 2015 stx15f.

 

[fxr3]

How is it that I can purchase a brand new Seadoo Spark for less money than a full suspension Haibike?

When you compare the two, there is a SIGNIFICANT difference in R&D as well as shipping costs. Bombardier is a massive company with huge overhead. The same cannot be said for Haibike.

The numbers just don't add up. There is WAY too much profit margin on eBikes...

Bombardier makes big jets, little jets, snowmobiles, motorcycles, jet skis, etc.
That puts the spark about equivalent to Haibike selling valve stem caps. Haibike could compete with anybody on valve stem caps.

 

[Don12]

This just isn't going to happen. Bikes in general lose far to much value after initial sale to support such a model. If a dealer could resell at 60% of the original value like car dealers can they would... Some bike shops sell new at 60% of MSRP if you happen on a good sale or demo. It just doesn't work like that with the level of sales in the US. There is no used market to support a high second owner sale value.

Ah Good point.. Maybe that will change or someone will think of another business model

 

[fxr3]

I think there are some economies of scale at play here too. BRP is a large company that manufactures/assembles in Mexico among other places. I bet across their product lines and brands, (ATVs, jet skis etc) that they are producing way more units than any individual e-bike manufacturer. I'm sure too, they share costs across some of their product lines whether manufacturing or distribution. I'm thinking the scale is just slightly different. So while yes, Bombardier has larger absolute cost/overhead, on a per unit basis I bet it might be smaller. Here's an article I read recently while not specifically about BRP, it mentions their Mexico manufacturing quite a bit:

https://www.bloomberg.com/news/feat...cturing-couldn-t-care-less-about-donald-trump

Save to say the spark is no more than a spark in BRP fire of gross income. Without checking, Europeans(where all the innovation is coming from) are income taxed at 50% + or -, and rumored to take month long summer vacations. Still, thank god thier into ebikes- cause I am too.
And, even more of a gamble on my part- I think Bombardier May be related to Polaris company- the peeps who make the ugliest ebike ever and still charge Haibike prices. Jeez, I can’t believe I’ve stuck up for haibike twice in this thread. At least they came up with “the tube” for 2018. A place to hide battery in downtube. Go figure

 

[fxr3]

This just isn't going to happen. Bikes in general lose far to much value after initial sale to support such a model. If a dealer could resell at 60% of the original value like car dealers can they would... Some bike shops sell new at 60% of MSRP if you happen on a good sale or demo. It just doesn't work like that with the level of sales in the US. There is no used market to support a high second owner sale value.

There will mostly be a confused market with you suggesting 40% off for a new bike, makes the ones buying at retail or those trying to sell at retail feel good, huh. Ebike economist or do gooder? No offense.

 

[pxpaulx]

There will mostly be a confused market with you suggesting 40% off for a new bike, makes the ones buying at retail or those trying to sell at retail feel good, huh. Ebike economist or do gooder? No offense.

I'm not sure I'm getting your point here. I mentioned sale or demo prices being out there, they are easy enough to find from multiple retailers at this point on a regular basis online.

Seems to me like the larger ebike companies are starting to get the message as well - haibike has several models at $2,200 MSRP for 2018, easy motion is starting at $2k for a bike that beats models 2 years old that would've been priced at $3k.

Another thing the OP missed is that making things smaller costs money - seadoo doesn't need to worry about the weight of a jet ski - they make a mold, put a motor in it and call it a day - any innovation is likely trickle down from their larger R&D ideas, and they also have a wealth of source material to develop from.

 

[fxr3]

I think OP just wanted to get a response from people- and he did.
I don’t recall ever seeing in 40% discounts on ebikes online, unless they were last years models. In fact I bought two Stromers from a Utah dealer discounting them and discontinuing the brand at 20% off a couple years ago. Simply because it was the first time I had seen any substantial discount advertised on stromers. Sold them for a very modest profit, and learned that not everyone is as gun ho as me on ebikes!

 

[Solom01]

My wife and I were riding our ebikes around Venice, FL this weekend and ran into another couple riding regular beach cruiser type bikes. They were pretty much tired out from riding their bikes in the heat and humidity and were really interested in our ebikes until they asked the price. We have inexpensive bikes, but when I told them that one cost about $1,200 and the other was about $2,800 they lost all interest, and were pointing out that they purchased theirs at a local bike shop for about $300 each. This is a pretty wealthy little town and the couple we were talking to live up North and have a vacation home on the beach here, so we're not talking about people who don't have money to buy an ebike- but from what I can tell as long as people in the US regard bikes as toys and not real transportation there is going to be a very limited number of buyers of ebikes that cost in the thousands, just as there are very few buyers of multi-thousand dollar non-powered bikes. Obviously many people in a specialized forum such as this may feel differently, but there is a reason why almost all bikes being sold are in the lower price ranges.