COVID Spike in E-Bike Demand Leads to Supply Shortages, But Long-Term Outlook Remains Bright

In March, when non-essential retailers began to shut down due to the COVID-19 pandemic, many bike shops were preparing for a sales dip. The opposite happened. Interest in bicycles and their electrically enhanced cousin, the e-bike, soared as homebound consumers sought:

• affordable alternative modes of transportation to public transit, where perceived risk of viral spread is high
• ways to stay active and fit while avoiding the perceived risk of visiting a gym
• fun new consumer products to fight the boredom of quarantine

As e-bike demand surged, supply chains struggled to keep up. For instance:

• According to the Denver Post, Dutch e-bike producer VanMoof, saw sales surges of 138% in the US and 184% in the UK in the February-April period over last year, with large gains reported in other European countries as well.
• However, the company’s e-bike delivery period has also expanded from one day to 10 weeks as a result of the backlog in orders.

In the large US market, where supply chains were already complicated by tariffs on Chinese bike imports, many bike shops are still unable to meet demand, leading to missed sales opportunities as consumers’ interest turns elsewhere.

As a result of the pandemic, global e-bike demand is expected to contract to just over 23 million units in 2020, according to a new Freedonia Group analysis. Highlighted below are key global market trends to watch as the pandemic recedes and world economies renormalize in 2021 and beyond.

High e-bike penetration in China to restrain global sales

Global demand for e-bikes is projected to hit 23.7 million units in 2024. Advances at the world level will be greatly restrained by subpar gains in China, which accounted for over three-quarters of 2019 sales. China will have more limited growth prospects going forward because of the large number of e-bikes already in use in the country and rising motor vehicle ownership rates. Additionally, internal combustion engine motorcycles, scooters, and mopeds remain popular.

Outside of China, aggregated global demand growth will be much faster

Outside of China, e-bike demand is projected to grow at more than double the average global rate. Multiple trends are expected to fuel growth, including:

• the increasing availability of e-bikes and growing consumer awareness
• rising personal incomes consumer spending in developing nations
• the growing popularity of cycling and mountain biking around the world
• the introduction of more capable and powerful e-bikes, helping to shrink the performance gap with scooters and mopeds
• the development of specialty models (e.g., cargo e-bikes, off-road) will stimulate consumer interest
• increased concerns about using public transportation in the wake of the pandemic and growing concerns about climate change and air pollution, which have led to government policies and subsidies aimed at expanding e-bike use

E-Bikes continue to face competition from more established alternative products

E-bikes compete directly with:

• conventional bicycles
• internal combustion engine scooters and mopeds, and to a lesser extent, light motorcycles
• electric scooters, mopeds, and motorcycles

E-bikes are an up-and-coming technology, and many riders of conventional bicycles have upgraded to electric models because they offer greater convenience and can travel greater distances at higher speeds. However, e-bikes are somewhat more expensive than conventional bicycles.

Because higher end e-bikes offer superior performance, they are able to compete with some ICE and electric scooters and mopeds, particularly in densely populated cities. E-bikes have captured market share from these products in some countries because they are less expensive and generally do not require insurance or a license. They are also less expensive to maintain and easier to operate. Nonetheless, global demand for ICE scooters, mopeds, and motorcycles remains well above that for e-bikes because they are more established products.

Want to learn more?

Global E-Bikes is now available from The Freedonia Group.

About the Author:

Peter Kusnic is a Content Writer with The Freedonia Group, where he researches and writes studies focused on an array of industries.