The European new energy vehicle market has a bright future, not only EU policies support carbon neutrality, car companies are also rushing to announce electrification schedules. However, the medium- and long-distance travel track is close to saturation, and the short direction known as the "last mile" contains new opportunities.
The European new energy vehicle market has a bright future, not only EU policies support carbon neutrality, car companies are also rushing to announce electrification schedules. However, the medium- and long-distance travel track is close to saturation, and the short direction known as the "last mile" contains new opportunities.
The answer is the E-bike. As a two-wheeled mechanical travel tool, the bicycle has been popular in Europe for nearly 150 years, and today it is a necessary leisure, fitness and entertainment carrier for every family. So if you equip the bicycle with motors, controllers and sensor devices to make riding easier, but at the same time retain the pedals and chainring, giving users the power to intervene to control the vehicle at any time, does it sound in line with the habits of foreigners who love cycling, and add a touch of exciting imagination to the sea capital track?
Family Cycling Event Source: Unsplash
Not surprisingly, this track is currently home to a large number of players. Among the Chinese brands focusing on the European market, TENWAYS, Urtopia and DYU ebike are among the leaders, and a total of hundreds of millions of yuan has been raised. Ma Yuchi, co-founder and CEO of Big Fish.ai, once said in the media: "In 2022, 7.5 million e-bikes were sold worldwide, and China accounted for 3 million to 3.3 million units. However, as a traditional large-scale bicycle market, European countries have also incubated many well-known local E-bike brands in recent years, such as VanMoof, Onemile, Mate.Bike and so on. When a group of outsiders who are full of confidence in Europe with a huge amount of capital arrive here, what kind of surprises or difficulties will they encounter?
· What exactly is an e-bike? Why don't Chinese catch a cold?
E-bike, if rigorous, we should translate it as "e-bike" instead of "e-bike". The reason is that the former retains the original form of the bicycle under the premise of installing the three-electric system, and the pedals and gears can still become the main tools for human drive; The latter is to weaken the manpower infinitely and may retain the pedal, but few people will actually use the pedal in the case of a strong battery drive. If it is explained more colloquially, both E-bikes and pure electric bicycles are driven by electricity, only there is a difference in the proportion of power sources: electric bicycles are partially driven by electricity, and pure electric bicycles are completely driven by electricity. And this is the source of the polarization between the two situations.
If it weren't for the popularity in the European and American markets, many people wouldn't know about the existence of E-bike. In China, in order to facilitate travel and avoid the use of human labor, and the relative chaos of the early electric car market, almost all people on the streets rode electric bicycles or even electric motorcycles.
In my memory, the rise of electric bicycles and electric motorcycles can be traced back to between 2005 and 2010, and the prosperity of this industry is actually due to the large-scale urban motorcycle ban movement in China at the beginning of this century. Between 2000 and 2005, major provincial capitals introduced relevant measures, either suspending licenses or restricting travel in different regions, such as Hangzhou and Wuhan, which banned motorcycles from 2002. Also at the end of 2002, the Ministry of Transport introduced a new rule that "motorcycles need to have a driver's license on the road", which undoubtedly restricted the sale of motorcycles. Another important factor is that the curtain of the transformation of old cities in domestic cities has just begun, large-scale infrastructure construction in many places has not yet begun, and even the road conditions in cities are relatively worrying, not to mention the potholed muddy roads in rural areas. Cycling is not only laborious but also endures bumps, so the emergence of electric vehicles has greatly alleviated the fatigue of people when traveling short distances.
Electric cars on the streets of the country Source: Unsplash
Various changes in the external environment have prompted the electric vehicle market to usher in a big outbreak in China. And battery cars are easier to get started than motorcycles, as long as they can ride bicycles, they will basically ride electric vehicles. Although China introduced the old national standard for electric vehicles in 1999, due to the rapid development of the market, the relevant provisions of the old national standard do not conform to the actual situation, and at the same time do not have mandatory legal effect, and the traffic police lack the existing corresponding legal basis when enforcing the law. Therefore, for a long time, the management of battery cars in China and local governments was basically in a laissez-faire and disorderly state. For example, in previous years, in many third- and fourth-tier cities and even first- and second-tier cities, citizens rode a battery car on the road, and basically no one would check whether they were wearing a helmet, let alone care whether they were speeding.
It is precisely because of this that many unwritten unspoken rules have been formed in the development of the electric vehicle industry over the years. For example, in order to last and speed up, many dealers will modify the battery or provide decoding acceleration services for customers, the former is too risky, and there are more and more models with long battery life, so it has gradually disappeared; The latter is still very common after the implementation of the new national standard in these two years, for example, pedal electric bicycles with a speed limit of 25km/h or less can actually reach 30-35km/h after unlocking.
In terms of price, the price of battery cars is much cheaper than starting a motorcycle with thousands of blocks. There are ultra-low prices of less than a thousand, and there are also basic market prices of two or three thousand. More than a decade ago, when most families did not have cars, battery cars were the main means of transportation. In summary, it is not difficult to understand that the main reason why Chinese residents are not cold to electric bicycles comes from the strong demand for daily short-distance travel, and the attributes of E-bike's leisure and exercise are more obvious, coupled with the domestic road management of electric bicycles is more relaxed, resulting in the overall market of E-bikes is small, the category is lackluster, and electric bicycles and electric mopeds are the only one.
· Behind the rapid rise of the European e-bike market
It sounds a little incredible, an electric bicycle with a unit price of 1,000-3,000 US dollars, equivalent to tens of thousands of yuan, has ushered in a contrarian growth in developed countries in Europe and the United States with serious inflation and sharp increases in the cost of living in recent years.
According to data, from 2017 to 2021, E-bike sales in Europe and North America increased from 2.5 million units to 6.4 million units, an increase of 156% in four years. Similarly, Precedence Research reported that the global e-bike market size was $17.56 billion in 2021, a year-on-year increase of 6.49%, and is expected to reach $40.98 billion by 2023, with a compound annual growth rate of about 10%. Focusing on Europe, the largest market for e-bikes, Germany, the Netherlands and other traditional bicycle countries have grown by more than 30% in the past two years, and the European Bicycle Industry Federation (CONEBI), the World Economic Forum and other institutions predict that the European E-bike market sales are expected to exceed 12 million units in 2025. Judging from current sales, although it seems that the new energy vehicle market is maintaining a high boom, Europeans already buy more E-bikes in a year than electric and plug-in hybrid cars.
Europe's cycling culture is deep, the world's three major cycling events have landed here, while cities and towns have narrow streets, complex road conditions, generally have bicycle lanes, the overall terrain is mountainous, steep terrain, elderly cyclists and long-distance commuters have a greater demand for assistance. From an economic point of view, today, when the penetration rate of cars has reached almost 2 vehicles per household, installing motors, controllers and sensor devices on bicycles seems to be of little significance to Europeans, but it actually solves the pain point of daily commuting and weekend sports and leisure - cost problems.
Taking Ireland, the fourth most expensive electricity bill in the European Union, as an example, the current price of electricity per kWh of Electric Ireland, Ireland's largest electricity company, is 0.43 euros (about 3.2 yuan). The battery capacity of the 4 is 84kwh and the range is about 550 kilometers, so a full charge costs 36 euros, which is 0.07 euros per kilometer; a TENWAYS best-selling model CGO600 Pro has a battery capacity of 0.36kwh, a range of 100 kilometers, charging costs 0.15 euros, and costs 0.0015 euros per kilometer. It can be said that if it is only used for a single commute of about 20-40 kilometers on the way to work, the economy of E-bike is simply a second to new energy vehicles, and it also saves the trouble of finding parking spaces everywhere and paying high parking fees.
Even when compared to public transport, the economics of e-bikes are still out, because public transport costs are generally high in European countries, discounts are only for students, and one-way buses and metros for adults cost up to 2-3 euros, and it is common to spend more than 100 euros a month. It is no wonder that the standard configuration of European and American families today is 1-2 cars + 2-4 E-bikes. A domestic cross-border E-bike seller once described it as follows: "A typical overseas multi-child family, as long as one of the parents buys the car, the other members of the family will basically follow the purchase after the experience." "Therefore, the high repurchase rate is also an important part of this track to attract overseas capital and brands.
TENWAYS CGO600 Pro Source: TENWAYS official website
More important is policy. In fact, Europeans do not want to ride popular electric bicycles in China, but are bound by strict management policies. According to relevant EU laws, pure motor-driven models with a power greater than 250w and a speed of 25km/h - 45km/h in Europe (that is, domestic electric vehicles) are classified as L1E-B models. In this framework, the product needs to be certified, users need to have a driver's license, wear a helmet and buy insurance, and cannot ride on non-motorized roads. As a result, trivial car processes, management clauses and high cycling costs dissuaded European consumers and basically lost the market. The simple and convenient E-bike is considered to be an "upgraded version of the bicycle", belonging to the L1E-A model, just like ordinary bicycles. This is because the sensors of most electric bicycles will stop the electric assistance as soon as they monitor the speed of more than 25km/h, so the complicated road procedure is omitted, and the European cities are generally relatively small, and the cross-city commuting is only a travel radius of thirty or forty kilometers, so it is popular with European cyclists.
In the process of E-bike's occupation of Europe, support and encouragement from the government also contributed to this trend of electrification. This is mainly reflected in the tax exemption and various subsidies for car purchases. For example, UK consumers can claim a tax deduction of 30% of sales up to £1,500; 100% tax relief for merchants across Belgium; The tax-free transport allowance in France can reach 800 euros; The Netherlands will increase the tax-free transport allowance for commuters who commute by bicycle to 21 cents per kilometre in 2023 (the cumulative annual subsidy may exceed 1,000 euros), and to 23 cents in 2024. In addition, the Netherlands is implementing a "bicycle scheme" that allows office workers to buy a bicycle of any style at a lower price through their employer and enjoy tax benefits of up to 40%, and insurance and maintenance can be exempted from taxes.
· Inventory of the competitive landscape of European local brands
In the European market, although local consumers have always had a definite demand, they have not been able to form a large brand that has the ability to monopolize the market. It should be pointed out that the unit price of overseas local brands is usually maintained at more than 2,000 US dollars, and the cost of parts replacement and maintenance is high, and in the early days, it was only a toy for the middle class and above.
VanMoof from the Netherlands, founded in 2008, began designing electric bicycles in 2014, they were the first to hide the battery in the body, and hope to follow Tesla's development trajectory, which makes it known as the "Tesla of electric bicycles". In 2021, Hillhouse announced that it had completed a $128 million Series C financing for VanMoof, the largest single financing in the history of the E-bike industry to date, making VanMoof the world's most funded e-bike company. However, according to foreign media disclosures, since entering 2023, due to the extremely unstable supply chain of parts and quality control problems, VanMoof has been trapped in the desperate situation of "the more you sell, the worse you lose". More and more users are complaining that their vehicles spend more time repairing in stores than on the road. In 2021, the company spent up to 8 million euros on repairs for users with quality problems. Currently, VanMoof is in a liquidity crisis and desperately needs blood transfusions from financial investors.
VanMoof models Source: Unsplash
Onemile, a brand with French genes, is a rookie in the short-distance travel track, and its product One Mile Nomad folding electric bicycle has become an Internet celebrity product as soon as it enters the market. The model is made of magnesium alloy die-casting, lightweight and compressive, using Tesla tram 21700 lithium battery of the same level and built-in BMS battery management and protection system, so that consumers can say goodbye to low battery anxiety.
In addition, the Belgian electric bicycle startup brand Cowboy received 23 million euros invested by Exor Seeds, an early-stage investment fund owned by the Agnelli family in Italy, in 2020; Two German e-bike brands, such as DANCE and LEMO, also completed new rounds of financing in 2021 and 2022, respectively.
There are also many automakers involved in this field. Luxury car brands Porsche, Lamborghini and BBA (Mercedes-Benz, BMW, Audi) have all pushed E-bike products, Tesla has launched E-bike products that can drive autopilot, and GM has also said that it plans to launch two electric bicycles. Among them, Porsche acquired a major stake in the E-bike brand Greyp at the end of 2021, and Fazua, a manufacturer of drive systems, in May 2022.
Some consumer goods companies are also trying to get a piece of the pie, German motor brand Bosch, shared mobility service Lime has entered, the latter with a striking green lemon LOGO almost monopolized the current German, Austrian and Hungarian sharing electric scooter market. British company Swytch launched a kit in 2017 that turns any bike into an electric bike for $449.
· The technological iteration of the Chinese E-bike brand and overseas adventure
China's overseas brands open up other possibilities. Similar to the situation of other Chinese goods, the biggest advantage of the export of Chinese E-bike products is still relying on the efficient domestic supply chain system and the ultimate cost performance that is difficult for local brands in Europe and the United States to match.
Dismantling the parts of the E-bike, we may find that in fact, they are essentially based on the mature domestic industrial chain. The frame comes from the architecture of traditional bicycles and some motorcycles, and the battery, motor and electronic control equipment are derived from the technology spillover of the domestic new energy vehicle and electric two-wheeler industry, and the supply chain of these three types of industries has basically reached a state of self-sufficiency after years of development in China (E-bike does not involve high-end chips of new energy vehicles), and the downstream suppliers of the industry are in the window period of domestic demand saturation and continue to go overseas to find new growth opportunities.
Another technical problem that has been broken by domestic manufacturers is to end the dependence on foreign mid-mounted motors. According to Geek Park, the advantage of the mid-mounted motor is that it can better balance the front and rear parts of the vehicle, but the domestic industrial chain lacks relevant technology accumulation. Later, through targeted research and development of front and rear motors, domestic manufacturers controlled the cost at a balance point that could not only pursue cost performance, but also meet the needs of daily commuting and leisure. Mature industrial chain + independent motor technology, naturally, in order to compete with foreign counterparts, the brand value exported by the Chinese E-bike brand is the ultimate cost-effective product.
Take DYU ebike (Big Fish.ai), for example, which officially went to sea in 2017. The design of its products is very unique, in order to distinguish from the traditional E-bike large vehicle volume, Big Fish.ai adopts the bionic design of dolphins jumping up, plus the foldable function, which not only accurately grasps the market segment of leisure and entertainment, light sports, but also meets the strong pain points of users who need to flexibly switch travel tools under the developed public transportation system in Europe. At the same time, it is also the first domestic brand to enter European and American supermarkets, and the product price is only a few hundred dollars, which is very attractive compared with the price of 1,000-3,000 US dollars, and soon opened up the low-end market overseas.
Big Fish DYU S3 Source: Big Fish Smart Traveler official website
TENWAYS belongs to Shenzhen Shifang Technology, which is a mysterious brand that has risen on the electric bicycle track in recent years. It is said to be mysterious, on the one hand, because it has no business in China, on the other hand, its brand is low-key, and its executives are rarely exposed in the media. Although it was only established in 2021, TENWAYS has long received investment from the deep-pocketed Tencent, Hillhouse and Alibaba, and has become an industry star in the eyes of various capitals. At present, its official website shows that there are three models of CGO600/CGO600 Pro and CGO 800, priced at 1499-1899 euros, with a range of 70-100 kilometers, considering the average life of the product of 3-5 years and excellent performance, which is already an acceptable price in Europe.
Of course, domestic traditional bicycle and electric vehicle manufacturers also have overseas layouts in the E-bike field, such as Giant, Maverick and Yadea. In other large enterprises, some focus on parts, such as the entry of the air conditioning brand Midea into the E-bike motor track; Some belong to the cross-border play ecology, such as Xiaomi launched the first generation of electric folding bicycles as early as 2016, and the drone brand DJI also launched electric folding bicycles.
However, although domestic travel brands have hitched a ride on E-bike, they still need to be wary of a bubble similar to the shared bicycle a few years ago, and should avoid falling into disorderly price wars under low technology while taking the cost-effective route, and do a good job in supplier management. Since the most critical three electric technologies in E-bike products are concentrated in the hands of upstream suppliers, for brands in the downstream of the industry, they can only play a role in a limited range such as product definition, design, and localized operations, and it is difficult to form industry barriers in the true sense. Perhaps in the near future, we will see the brand side acquire suppliers or even build factories alone after integrating technology and talent resources, and wait for the industry to fully supply overseas markets, and in turn feed back and cultivate China's own E-bike cycling culture and market.