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Pedaling towards sustainability; Electric Bicycle (E-Bikes) to cross a market value of more than USD 29 Billion globally: Actual Market Research
Oct, 01
2021

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Pedaling towards sustainability; Electric Bicycle (E-Bikes) to cross a market value of more than USD 29 Billion globally: Actual Market Research

 

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The study conducted by Bonafide Research that  involved riders new to e-cycling, found that most could complete their commutes faster and with less effort on e-bikes than standard bicycles, while elevating their breathing and heart rates enough to get a meaningful workout. An electric bicycle is a bicycle equipped with an electric motor that may be activated to assist with or replace pedaling. The earlier image of these cycles was it being a vehicle for the lazy peddlers or the elder age group people. These bikes/ bicycles allow making pedaling easier by drawing power from the attached battery. The tiring exercise can be made into a fun ride with just acceleration by the press of a button. E-bike manufacturers are focusing on improving the entire user interface by creating and developing e-bikes that can interact with the riders' smart-phones and deliver real-time information on the speed and battery level. The increased popularity of the e-bike can be attributed to improved battery life, motor design and lighter weights, as well as the growing need to reduce pollution and boost physical activity.

According to the report 'Global Electric Bicycle (E-Bikes) Market Research Report, 2027’ published by Actual Market Research the market was valued at more than USD 29 Billion, which is anticipated to reach around USD 49 Billion during the forecast period. Further, the market is projected to rise with more than 8% CAGR for 2022-2027. Many governments across the world are taking initiatives towards the reduction of carbon footprints and encouraging electric bicycles to use is one of the most prominent steps. This is expected to be the major market driver in the coming years. For promoting the e-Bikes, many governments are arranging awareness campaigns in collaboration with private and non-profit organizations. The final goal for such activities is to reduce the rate of carbon dioxide emission. Governments of different countries are offering subsidies to boost the sale of e-Bikes.

The Asia Pacific region represents one of the largest markets for e-bikes across the globe, primarily driven by the growing consciousness for the environment. This has shifted consumers’ preferences toward e-bikes as they are eco-friendly, help reduce carbon footprints and can charge through solar power. Besides this, the increasing collaborations between various foreign investors and domestic players have paved the way for a competitive market, offering an attractive price range, which is acting as a major growth-inducing factor. Furthermore, the flourishing tourism industry has prompted a rising number of tourists to opt for e-bikes as a self-driving alternative to commute due to their effortless riding experience. These bikes are also extensively used for various adventure sports, which is increasing their popularity among the younger generation in the region. Globally, the Asia Pacific region leads the market which in terms of value held more than 70% in the year 2021.

Further, the market for electric bikes in Europe is expected to witness significant growth during the forecast period with an increasing number of companies entering the market and increased demand for e-bikes in last-mile deliveries. Some of the major reasons considered for adopting e-bikes are the health benefits, environmental benefits, reduction in expenditure, avoidance of traffic congestion, and the increase in demand for e-bikes as sports equipment among youth. E-bikes in Germany are the preferred mode of mobility for sports and leisure. Globally, Europe held to the second position, following Asia. The introduction of e-cycles in Cycle tourism in Europe is expected to be a major market attraction in the coming period. Europe being home to a number of travel destinations has been successful in wooing the tourist with the different experience of e-bikes. In the region, the electric bike industry is not only aiding the environment but is also providing economical support by generating jobs. It is said that the production of 1000 electric bicycles creates 4-5 jobs, whereas the production of the standard bicycle creates merely 2-3 jobs. 

By type of propulsion, the e-bike market is classified majorly into two segments- Pedal Assisted & Throttle Mode. The main difference between the two is that in pedal-assist the rider is expected to pedal alongside the power received from the motor, whereas in the throttle mode, no pedaling is required and the bike moves solely on the power received from the motor. The market is led by the pedal-assisted, considering its advantage of allowing the rider to ride farther & faster and conquers tougher terrains. On the other hand, the throttle e-bikes allow the rider to make the motor push the bike forward at the ease of a button or a twist, and pedaling is optional. Based on class type, the e-bikes can be categorized as Class 1: Pedal Assist, Class 2: Throttle On Demand, & Class 3: Speed Pedelec. Of this, the market is led by the class 1 electric bicycle which is pedal-assisted, holding approximately 70% of the market share. In the majority of the states, class 1 electric bicycles are treated like mountain/ pavement bicycles which are legally allowed to be driven in the regular bicycle lanes. E-bikes that are pedal-assist only, with no throttle, and a maximum assisted speed of 28 mph, are included in the speed pedelec segment.

Electric transportation is not limited only to four wheels as e-bikes are experiencing incredible growth in sales, not only in the European countries but also in the North America, owing to technological advancements in battery packs and drive motors and e-bike sharing. E-cargo bikes are gaining traction in major cities in the region, as leading logistics companies like DHL Express, Fed-Ex, and UPS are employing e-bikes for their last-mile delivery. These electrically-assisted cycles, which can carry around goods ranging in size from 400 pounds to 800 pounds, are also in use in several pilot projects in US cities. In the global market, North America is one of the lowest contributing regions, which in 2021 accounted for less than 5% of the market share in value & volume terms. The major countries are continuing to urbanize and the funds allocated to transportation are now becoming scarce. Many factors like adequate infrastructure and supportive policies are likely to be the major factor for the preference of bicycling as viable transportation. The region is slowly shifting towards the wider adoption of e-bikes.

Traffic is one of the major problems of the South American cities, and according to the 2018 INRIX Global Traffic Scorecard, Colombia’s capital city of Bogotá as the 3rd most congested city in the world, followed by Mexico City (4th) and São Paulo (5th). The study also calculated that an average driver in Bogotá spends about 272 hours in traffic every year. Technological advancement and lightweight materials are helping the e-bike market to grow at a rapid pace. Growing awareness among peoples for environmental concerns, e-bikes along with the benefits of a bicycle coupled with the advantage of extended range through battery especially for recreational activities, as they offer the fun of cycling, combined with the suitability of an automobile. Furthermore, these bikes also allow consumers to navigate through rough terrains, which are otherwise difficult to navigate without an electric motor. The idea of bike/e-bike leasing is becoming increasingly popular in South America. Also, various local startups and companies from other countries are expanding their market presence in South America. For instance, Yellow offers both conventional and e bike-sharing options through its platform, as its conventional bikes operate 24 hours, the e-bikes operate for limited hours of 8 am to 9 pm due to maintenance, recharging, and cleaning.

Further, the overall market of electric bikes can be divided into three segments based on the battery used- Lithium-Ion, Lead Acid & others. The lithium-ion battery segment is to lead the market by the end of 2027, with not much share difference from the following lead-acid segment. However, in 2021 the lead acid battery segment led the market. The growth of the lithium-ion batteries can be sited to these being eco-friendly and life cycle & weight ratio in comparison to other batteries. The decline in the price of this battery is also one of the major reasons for its high preference in the coming years.   
 
On the other hand, in the recent years, consumers are considering electronic bikes as an ideal substitute for smart cars, public transport and scooters. These bikes are highly beneficial in tackling traffic congestion as these bikes are smaller in size and attain higher speed. The region of the Middle East is well known for its oil wells and fuel production capacity. However, in recent years the sight of electric cars whizzing around the road is much common. This has also aided the market growth of electric bicycles or e-bikes. The market is still in its initial stages in the region but is believed that especially the UAE will have a good share in the global industry in the next few years.

The major application of the e-bikes is seen in city & urban travel, as with the increasingly busy lives there has a hike in the need of daily commute. The decreasing reliability & the need to maintain the social distance is hampering the like of public transportation. On the other hand, there has been an increasing awareness about the need for sustainable environmental concerns. In order to give a solution to such challenges, e-bikes are an ideal solution for urban mobility. The use of e-bikes in urban dwellings accounted for more than 50% of the market share. One of the major application trends in the developed regions is the use of electric bikes by e-commerce and food delivery service providers. This is to give a huge boost in the market. Among the major application segments, the cargo segment is expected to be growing as the fastest segment.

Covid-19 Impacts:

Due to the COVID-19 pandemic, commuters are mostly avoiding public transportation. According to industry experts and e-bike manufacturers, such as Rad Power Bike, VanMoof, and Lectric e-bike, e-bikes are increasingly considered an ideal transportation mode as cities emerge from the quarantine approaches in the US and Europe. In addition, owing to the government restrictions on public transport because of social-distancing guidelines, commuters are adopting the bike as the mode of day-to-day transportation. Thus, the electric bike industry is one of those industries that is poised for better growth post-Covid-19. However, the sale of e-bikes was dampened in the first quarter of 2020, as e-bike stores were closed due to lockdown. Apart from increasing consumer preference toward recreational and adventure activities, the adoption of e-bike applications in several sectors, like logistics and e-bike rental services, is expected to drive the market during the forecast period. As cities worldwide emerge from lockdowns, the demand for e-bikes is picking up pace due to their convenience and cost of operations. Regions such as Europe are witnessing a shift in consumer motive for buying an e-bike from leisure to daily use.