US & Global Economic Impact Analysis and Forecasts

Freedonia analysts and economists are sharing their insights on how major events are impacting different parts of the US and global economies.

The Electric Conversion: France is Offering €4,000 to Those Who Trade Their Car For an E-Bike

In a continuation of a decade-long trend, the use of e-bikes surged in many parts of the world during the COVID-19 pandemic. This happened despite disruptions to supply chains that often resulted in delivery delays or price increases.

Governments have built on the recent rise in interest by offering incentives to consumers to replace gas- or diesel-powered motor vehicles, motorcycles, and scooters with e-bikes. These programs are motivated by the need to address air pollution levels, traffic issues, and climate change challenges. The incentives to switch from motor vehicles to greater use of e-bikes is also targeted to help meet future emissions reduction targets.

Most recently, in August 2022, France increased the subsidy offered to individuals that replace conventional motor vehicles with e-bikes to 4,000 euros as part of efforts to increase the sustainability of transportation. The subsidy – based on a program carried out in Lithuania – was initially adopted in 2021. It was subsequently increased in 2022 because levels of e-bike use in France on a per capita basis continued to lag behind that of neighboring countries such as Germany, the Netherlands, and Belgium.

The French government hopes to see the number of people that switched to bicycles and e-bikes to reach 9% in 2024, compared to 3% in 2022. This policy will be complemented by an increase in the length of bike lanes in the country.

Freedonia analysts continue to watch factors such as the spread of incentives, expansions in production capacity, improvements in battery technology, related infrastructure development from bike lanes to charging stations, and consumer sentiment about sustainability issues for direct and indirect effects on the electric transportation industry.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, especially coverage in transportation-related industries with titles such as Global E-Bikes, Global Motorcycles, Global Hybrid & Electric Vehicles, and Bicycles: United States. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Automotive & Transport      Consumer Goods    

Autonomous Farming?

A big area for M&A activity in the last few years is in artificial intelligence, sensors, and related hardware.

The example of John Deere’s push into technology is a telling one. The company has been making many acquisitions in this area and this month announced it was acquiring artificial intelligence start up Light.

This announcement reflects two important trends:

1) It shows a legacy company increasingly moving into AI/robotics – a trend toward innovation that is occurring across industries and should not be ignored.


2) The company Deere acquired (Light) started out making cameras for smart phones, but then became a major player in autonomous vehicles by making advanced cameras and sensors – an example of a company taking something that was pretty basic and seeing a lot of downward cost competition and creating its own market by taking what it can already do into new markets.

Freedonia analysts continue to watch trends in AI, robotics, and other automation efforts across industries for additional opportunities.  

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, especially coverage in Construction & Building Products, Consumer Goods markets, and Automotive & Transport industries. Freedonia Custom Research is also available for questions requiring tailored market intelligence.


Sanctions, War, & Indirect Effects

So you think your business won’t be impacted by the fighting in Ukraine and accompanying sanctions on Russia? Maybe…

But do any of these statements sound familiar?

“I don’t source my wheat from Russia.”

Other companies do and substitutes for Ukrainian and Russian wheat have to come from somewhere.

Global food processors that typically source from Ukraine and Russia might approach US farmers and processors to get what they need. Result: rising prices for wheat worldwide.

“We’ll transition to electric vehicles as a way around Russian oil and rising gas prices.”

That might a good long-term strategy to become less dependent on oil in general, and many companies are making moves in that direction with stated goals to convert their fleet.

But that won’t necessarily help if you’re in Europe, where your electricity might still be generated by Russian natural gas.

It also might not be much near term help if you can’t get access to a hybrid or electric vehicle to replace your conventional gas-powered vehicle. Semiconductor chip shortages and supply challenges in accessing parts of all stripes are still leaving car dealers and medium- and heavy-duty vehicle vendors with reduced inventory and potentially long wait times.

“I source from Eastern Asia & the EU, not Russia.”

Closures of ports and changes in air space regulations and allowances might slow the international flow of goods, even if they don’t actually come from Russia. Russia is a very large country, so any shipping routes (air, land, or sea) that need to go around Russia or its ports could take longer and require more fuel. Result: potentially more time to ship and rising shipping costs in an era already challenged by high shipping costs and long lead times.

Freedonia analysts will continue to watch changes in sanctions and economic losses (crops, industrial and transportation infrastructure, worker productivity) as well as both the direct and indirect effects leading to price changes or opportunities to supply goods and services into new markets.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research. Freedonia Custom Research is also available for questions requiring tailored market intelligence.


Cummins & Meritor: Sustainability & Expected Growth of Electric Heavy Trucks Drives Acquisition

This week, the major engine manufacturer Cummins announced it will be acquiring Meritor, a leading supplier of vehicle parts. Executives say expected growth in electric heavy vehicles and the need to lead in this area was the key to this purchase.

The two companies are doing complementary research and development. Cummins is developing electric power trains, and Meritor is developing components for electric trucks, such as axels which have integrated electric motors.

Since it is often less expensive and easier to acquire needed technology than to undergo in house R&D or purchase the technology from a third supplier, expect to see more acquisitions relating to sustainable technologies, particularly among companies with complementary pursuits.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, including the update of Global Hybrid & Electric Vehicles which is in progress now and Global Medium- & Heavy-Duty Trucks & Buses and Medium- & Heavy-Duty Trucks & Buses: United States from Freedonia Focus. Freedonia Custom Research is also available for questions requiring tailored market intelligence


What Freedonia Analysts Are Chatting About…

Freedonia analysts participate in a group chat where they share news, notes, and commentary of general interest... or things that entertain us. Sometimes, we are just sharing links. Other times, the links spark conversation. Below are excerpts from a few of those recent conversations:

“This has been a store-within-a-store extension recently... they are going more the way of Tractor Supply with this (pet & home supplies in one place) concentrating more on the home/decor/consumer angle and leaving more of the contractor/professional side to Home Depot. You can see that in the look/style of the stores too.”

“Tractor Supply is big in our area and we get a ton of ads for their pet products.

“Another recent store-within-a-store example is Sephora in Kohl’s.”

“Interesting! But stores have to be careful not to get too cluttered.”

“What happens when there is a store-within-a-store-within-a-store?... META

“Who will pay for it?”

“I think the technology started in the electric/hybrid bus industry. There was a lot of innovative charging technologies being developed for transit buses over the last 5 years or so. A few years ago, scientists in the Netherlands also had an idea of incorporating light and screens into the road to broadcast warnings to motorists that are driving. Interesting that people are rethinking something as simple as the road.”

“They have those electric roadways that charge EVs in Sweden. It seems much more feasible in a country that small.”

“Does it matter that Sweden’s roads are colder? Would a desert area be able to use them?”

“Trivia: roads in Las Vegas can reach 160 degrees”

“Hahaha ‘energy crisis’… wait, my cup is empty now too – more coffee!”

“Might hurry along the BYOC trend again... sell the beverage, not the cup!”

“I think some people are still squeamish about handling others' stuff (maybe especially something like a cup)”

They had a process for it pre-pandemic... I'm sure they can do it again.”

Starbucks has had its reusable cup discount back in place since June. ‘Starbucks held extensive trials and has adopted this new process, using a ceramic mug to transport the reusable cup through the bar, in EMEA and Asia Pacific to reintroduce reusable cups with confidence. Only clean cups will be accepted.’”

“Is the trucker protest in Canada going to cause a lot of trouble as the shipping containers parked out at sea?  I know that it's not nearly as expansive an event as the ships, but…”

“The bridge carries 30% of all truck trade between the US and Canada, so I think there will be pushes from both sides to cut this as short as possible.”

“See this? ‘New Zealand police arrest Covid protesters as 'freedom convoys' spread’ Some countries are already cracking down.”

“It may, if it persists or spreads. They are rerouting trucks north to a different bridge, but there is a 17 mile backup at this point.”

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research. Freedonia Custom Research is also available for questions requiring tailored market intelligence.