Here’s why investment in ebikes is booming
Ebikes are powering a green future for mobility
Notable ebike investments in 2021
And it’s not only ebikes for purchase by consumers raising money.
What’s driven the massive uptick in ebike investment?
BothPointillart and Morrow attribute the mammoth increase in ebike investments to several factors:
COVID-19 got people back on their bikes to reduce their time spent on public transport. Cities made cycling safer: London introducedtemporary cycling lanes, and New York limitedseven miles of streets to pedestrians and cyclists.
Pointillart asserts:
Legislative and infrastructural changes in the US mean thatebikes are no longer classified as motor vehicles,and can therefore be ridden on the road. In February, anE-BIKE act introduced a 30% US federal tax credit for electric bicycle purchases.
Pointillart also sees a trend of ebike purchases or subsidized by employers to aid employee retention.
Both agree that battery innovation has also driven the acceleration of interest in ebikes, with batteries faster to charge, stronger, lighter, and longer-lasting than ever before.
— Companies like Cowboy are leading the charge for fast long-life batteries.
Changes in consumer behavior are also responsible for ebike investments.According to Morrow, there’s a significant millennial trend where “the next generation of consumers are buying fewer cars and have less desire to own big purchases like houses. They prioritize sustainability as a lifestyle choice.”
What’s the reason for all the investment in direct-to-consumer ebikes over micromobility?
While micromobility continues to attract funding, the direct-to-consumer market has several upsides.
Morrow asserts:
Withmicromobility, you’re not tied to a brand. It’s about whatever is closest to you and convenient. There’s no brand loyalty. With a VanMoof or a Cowboy, you are building brand loyalty.
Further, there is a much higher margin from a standalone purchase of ebikes. Micromobility ebikes also have problems with a decrease in lifetime value and low resale value.
Morrow also notes that investing in consumer bikes takes out the political challenge of working with local governments that that can take away your city operating permit for various reasons, like bikes incorrectly parked and bike rider behavior.
What kinds of factors make investors put their money towards one ebike company over another?
I asked Pointillart what makes an investor choose a brand. He explained:
He gave the example of companies offeringgroup bike toursevery weekend to build a community around their brands. “Creating community creates a feeling of belonging, that will create stickiness, and will create positive word of mouth.”
The importance of localization in the direct-to-consumer market
According to Morrow, your local market is critical:
Pointillart believes:
America remains the holy grail for ebike investors
Expansion to the US is the next step for many ebike companies.Morrow explains:
She notes VanMoof’s intention to ship 10 million bikes and believes:
Investor interest in ebikes shows no sign of waning. It’s a highly competitive market and it will be interesting to see how brands use their funds for R&D and to cement brand loyalty. Additionally, I think we can expect to see a substantial amount of M&A activity in the first half of 2022.
Story byCate Lawrence
Cate Lawrence is an Australian tech journo living in Berlin. She focuses on all things mobility: ebikes, autonomous vehicles, VTOL, smart ci(show all)Cate Lawrence is an Australian tech journo living in Berlin. She focuses on all things mobility: ebikes, autonomous vehicles, VTOL, smart cities, and the future of alternative energy sources like electric batteries, solar, and hydrogen.
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COVID-19
COVID-19 got people back on their bikes to reduce their time spent on public transport. Cities made cycling safer: London introducedtemporary cycling lanes, and New York limitedseven miles of streets to pedestrians and cyclists.
Pointillart asserts:
Government and employer efforts
Legislative and infrastructural changes in the US mean thatebikes are no longer classified as motor vehicles,and can therefore be ridden on the road. In February, anE-BIKE act introduced a 30% US federal tax credit for electric bicycle purchases.
Pointillart also sees a trend of ebike purchases or subsidized by employers to aid employee retention.
Battery innovation
Both agree that battery innovation has also driven the acceleration of interest in ebikes, with batteries faster to charge, stronger, lighter, and longer-lasting than ever before.
— Companies like Cowboy are leading the charge for fast long-life batteries.
A new kind of consumers
Changes in consumer behavior are also responsible for ebike investments.According to Morrow, there’s a significant millennial trend where “the next generation of consumers are buying fewer cars and have less desire to own big purchases like houses. They prioritize sustainability as a lifestyle choice.”
While micromobility continues to attract funding, the direct-to-consumer market has several upsides.
Morrow asserts:
Withmicromobility, you’re not tied to a brand. It’s about whatever is closest to you and convenient. There’s no brand loyalty. With a VanMoof or a Cowboy, you are building brand loyalty.
Further, there is a much higher margin from a standalone purchase of ebikes. Micromobility ebikes also have problems with a decrease in lifetime value and low resale value.
Morrow also notes that investing in consumer bikes takes out the political challenge of working with local governments that that can take away your city operating permit for various reasons, like bikes incorrectly parked and bike rider behavior.
I asked Pointillart what makes an investor choose a brand. He explained:
He gave the example of companies offeringgroup bike toursevery weekend to build a community around their brands. “Creating community creates a feeling of belonging, that will create stickiness, and will create positive word of mouth.”
According to Morrow, your local market is critical:
Pointillart believes:
Expansion to the US is the next step for many ebike companies.Morrow explains:
She notes VanMoof’s intention to ship 10 million bikes and believes:
Investor interest in ebikes shows no sign of waning. It’s a highly competitive market and it will be interesting to see how brands use their funds for R&D and to cement brand loyalty. Additionally, I think we can expect to see a substantial amount of M&A activity in the first half of 2022.
