Differences Between the European e-Bike Marketplace and the Emerging US Market

May 13, 2014

I recently attended the Bicycle Leadership Conference in Monterey, California. One of the more interesting seminars was titled "E-bikes: From Europe to America." The panel included John Dixon, director or global sales for SRAM, Rob Cappucci, category manager for SRAM, Larry Pizzi, president of Currie Technologies, Claus Fleischer, senior VP-E-bike Systems for Bosch, and Zack Krapfl, cofounder of GSD Global.

Basically, the Q&A session addressed how the industries differ and outlined the trends, moving forward.

Here is an overview of what I learned:

  • The definition of an e-bike in Europe is a little different than in the U.S. In Europe, a bicycle is considered an e-bike only if it can only be propelled with human-powered torque. The torque sensors will assist the rider only if they are providing their own power. In most countries, they can only go 6 kph without any assistance. In the U.S., this is not the case. Although many companies are adopting similar technologies, you can still buy an e-bike that is similar to a motor scooter or moped. Push a button and away you go! Personally, I feel (for a number of reasons) that the European model is a better way to go. I think the insurance industry would agree but that is another story altogether.
  • In the core European markets (Switzerland, Germany, The Netherlands), 1.1 million e-bikes were sold last year, and the anticipated growth rate is 15%. Unfortunately, we don't have great recordkeeping methods in the US, but the panelist thought there there were fewer than 100,000 units sold, though the growth rate is much higher: 25%. Experts anticipate that in the near future a quarter of bikes sold will be e-bikes.
  • In the United States, e-bikes are mostly purchased by aging baby-boomers. Initially European e-bike sales were dominated by the 60+ crowd as well, but now, with higher performing (and sexier) bikes, the average age is much lower. Most e-bikes now sold in the U.S. are "Dutch style," meaning they don't look like a sleek road bike. As the bikes evolve, younger users in the U.S. are likely to start purchasing in greater numbers as well. With fuel costs increasing, many younger individuals are using e-bikes as an alternative to driving/commuting. I have noticed this for several years. The utilitarian e-bike in metro areas has always intrigued me.
  • There are only 100 total "e-bike only" dealers in Europe. Conversely, the vast majority of e-bike dealers in the U.S. are "e-bike only." This poses some problems for the industry in the U.S. In Europe, the traditional bike dealer knows bikes. They know how to fit them, and they know how to accessorize them, etc. Most e-bike dealers in the U.S. may not have such an expansive bicycle-industry background/experience. Many of the shops are start-ups, where the owners have never been in the industry. This could be a potential problem as they may not know how to properly fit the bikes. The U.S. dealers have a ton of passion about e-bikes, but (again) bicycle-industry experience may lack.
  • Average price points are pretty similar between Europe and the U.S., with $2,100 to $2,500 being an average purchase price. Someone asked whether they thought the price points would drop. A definitive NO was the answer. This is due to raw material costs. Anything less than $2,000 ends up being a very poor quality product.
  • One thing that I found to be very interesting is that many auto manufacturers, including Volkswagon and BMW, are now entering the e-bike market. Why? They consider it a great way to market their overall brand. People are passionate about bikes and if they keep seeing a cool BMW or VW e-bike, they may be more inclined to purchase their automobiles.
  • The end of the discussion was about how they are being used. In Europe, they are primarily used on roads. Off-road e-bike sales are growing, and is the fastest sub-sector of European e-bike growth. In the U.S., it is similar and there was a lot of discussion about the use of these bikes on gravel or off-road, as many are looking to get away from dangerous automobile traffic. This poses another set of questions about whether they should be allowed off-road. Since there are inconsistencies in state laws in the United States, many landowners, including the federal government, will need to address the definition of "non-motorized." Will they be allowed on singletrack trails on federal or state land? Should they be allowed? Those are some tough questions.
  • A side discussion started about e-cargo bikes and the use of e-bikes for motel/hotel guests and on corporate and university campuses. Personally, I have a few clients who promote their "green" business practices by using e-bikes with trailers. I see this business model growing quickly. This was a fascinating discussion. The U.S. market is clearly several years behind Europe. In Europe you can take an e-bike tour in the mountains and go to battery exchange stations at various cafe's, restaurants, etc.

Just in the past few months, I have had a few clients look to enter the e-bike tour business. The technology is drastically improving. Where will we be in the U.S. in two years? Five years? I think the baby-boomer crowd will continue using e-bikes to keep active. they could also be used for an alternative to indoor physical therapy sessions.

What else will we see?