Dave Hurst

Principal Research Analyst

John Gartner

Research Director

Executive Summary: Electric Bicycles Global Market Opportunities, Barriers, Technology Issues, and Demand Forecasts for E-Bicycles, Pedal-Assist Bicycles, and E-Bicycle Batteries and Motors

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Published 1Q 2013

RESEARCH REPORT

Electric Bicycles

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Section 1 EXECUTIVE SUMMARY

1.1 Introduction

The electric bicycle (e-bicycle) market varies greatly by product type and regional demand. Many Asia Pacific countries and some European countries have embraced the e-bicycle, while it is still a nascent market in other regions. Even the vehicle model types reflect this variety. While, in essence, the e-bicycle is a traditional pedal bicycle with a battery pack, electric motor, and a user control attached to the handle bar, the variety of products available to consumers in different parts of the world goes far beyond this simplistic definition.

1.2 Market Issues

Part of the challenge when measuring the market for e-bicycles is one of the definitions. The market for e-bicycles, particularly in China and other Asia Pacific markets, is fragmented with a variety of styles and vehicle weights. E-bicycles designed to look and drive more like scooters (scooter-style electric bicycles or SSEBs) are often sold as e-bicycles but do not exactly meet the letter of the law for how an e-bicycle is defined. For the purposes of this report, Navigant Research defines e-bicycles by region, as follows:

Table 1.1 E-Bicycle Definitions by Region, World Markets

Region Top Speed Electric

Motor Size Other Requirements

United States <20 mph (<32 kph) Max 750W Has operating pedals

Canada <20 mph (<32 kph) Max 500W Vehicle weighs less than 120kg; has

operating pedals

Western Europe <15.5 mph (<25 kph) Max 250W Motor operates during pedaling only

(Pedelecs)

Eastern Europe <15.5 mph (<25 kph) Max 250W Has operating pedals; some markets

require motors only operate during pedaling

China ≤12.4 mph (≤20 kph) No limit Has operating pedals; 40kg max

weight

Rest of Asia Pacific ≤15.5 mph (≤25 kph) Max 250W Has operating pedals

Latin America <15.5 mph (<25 kph) Max 250W Has operating pedals

Middle East ≤15.5 mph (≤25 kph) No limit Has operating pedals

Africa ≤15.5 mph (≤25 kph) No limit Has operating pedals

(Source: Navigant Research)

The market for e-bicycles is being driven by a number of key market forces:

» Increasing usage of bicycles and two-wheel vehicles as commuting vehicles

» Growing urbanization is putting traffic stress on city streets and pushing people toward other options

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» Increasing market entrants and maturity of products is increasing the acceptability of e-bicycles to those who may not have considered them in the past

» Increasing quality and affordability of lithium ion (Li-ion) batteries

» Rebounding economy in North America and, to a lesser degree, Europe

In many regions city streets are getting increasingly clogged with traffic, and e-bicycles are often cited as a tool for avoiding the traffic (as are traditional bicycles). Chinese cities have been a prime example as consumers continue to purchase e-bicycles in the millions (28 million sales expected in 2013), even as cities begin to consider bans on e-bicycles because of increasing accident and bicycle congestion. Navigant Research’s base forecasts assume that bans will either remain in place or be enacted in parts of several cities, including Beijing, Shanghai, and Shenzhen. In North America, a market not typically known for its bicycle commuters, the commuter-style e-bicycle is starting to take a bigger share of the e-bicycle market, particularly in West Coast states.

Many interviewed for this research pointed to a shift in demographics for e-bicycles. While in past years the e-bicycle was relegated to the older generations (age 50 and older), this year in both Western Europe and North America manufacturers are noting increasing interest from those under age 40. Another factor in some countries is the increasing maturity of the market. Germany and the Netherlands are both reaching mature market stages, with the Netherlands unlikely to see additional significant growth of e-bicycles in the coming years.

1.3 Technology

E-bicycles are gradually turning to Li-ion batteries to provide longer lifespans at lower weights. Several interviewed for this report pointed to lithium iron phosphate (LiFePO4) as the most e-bicycle-friendly battery technology because of its combination of thermal stability and long life, though it should be noted that there is plenty of disagreement over which specific lithium technology is truly best for e-bicycles.

The placement of electric motors for e-bicycles is also receiving increased consideration. E-bicycles can have motors in one of three locations: the front wheel hub, mid-mounted at the bottom bracket (pedals), or the rear wheel hub. The rear wheel hub is the most popular location, and most of the large Chinese market is utilizing rear hub motors (worldwide sales are expected to reach 35.9 million sales in 2020). Rear wheel hubs are thought to be best for throttle-controlled bikes, whereas the other locations work well with e-bicycles that only provide electric power when the pedals are being used (pedal assistance). The mid-mount motor is the fastest growing segment (9.3% compound annual growth rate [CAGR] between 2013 and 2020 worldwide), in part due to strong competitors like Panasonic and relatively new competitors including Bosch and AEG.

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1.4 Forecasts

The market for e-bicycles is expected to grow at a modest rate of 3.1% (CAGR between 2013 and 2020). North America, Western Europe, and Latin America are all showing signs of faster growth (9.7%, 9.1%, and 14.4% CAGR, respectively). Overall, Western Europe is currently the second largest market (behind China) with an expected 1.0 million sales in 2013 and growth to 1.9 million by 2020.

The large Chinese market is expected to reach 28.0 million e-bicycles in 2013, which is 92% of the total world market. Because of its size, China has been excluded from Chart 1.1 in order to show granularity of the other markets. The e-bicycle market in China is slowing, however, due to a weakened economy, increased consolidation of manufacturers, and supply chain issues in the lead-acid battery market. China’s 2.8% CAGR is not expected to return to its historic fast rate of growth (13.4% CAGR between 2005 and 2013) in the coming years, resulting in annual sales of 33.9 million e-bicycles in China in 2020.

Chart 1.1 Annual E-Bicycle Sales by Region and Forecast Scenario, World Markets: 2013-2020

(Source: Navigant Research)

The vast majority of the e-bicycle market is currently using sealed lead-acid (SLA) batteries, but this is shifting slowly. E-bicycles utilizing SLA compose 92% of the market now, but that is expected to fall to 85% by 2020 as Li-ion batteries grow in popularity. Asia Pacific is the largest market for Li-ion battery e-bicycles, thanks to a large Japanese and Chinese market (320,065 and 717,227 e-bicycle sales in 2013, respectively). Western Europe is the second largest region (815,309 sales in 2013) thanks to Germany (323,172) and the Netherlands (157,306). The market for Li-ion e-bicycles is growing at a CAGR of 14.5% and is expected to reach 5.7 million vehicles by 2020.

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

2013 2014 2015 2016 2017 2018 2019 2020

(E-B

icyc

les)

North AmericaWestern EuropeAsia Pacific (Excl. China)Rest of WorldAggressive Forecast, Total (Excl. China)

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Section 8 TABLE OF CONTENTS

Section 1 ........................................................................................................................................................... 1 

Executive Summary .......................................................................................................................................... 1 

1.1  Introduction ........................................................................................................................................ 1 

1.2  Market Issues ..................................................................................................................................... 1 

1.3  Technology ........................................................................................................................................ 2 

1.4  Forecasts ........................................................................................................................................... 3 

Section 2 ........................................................................................................................................................... 4 

Market Issues .................................................................................................................................................... 4 

2.1  Definition ........................................................................................................................................... 4 

2.1.1  Throttle Control and Pedal-Assist Definitions ................................................................................. 5 

2.2  Current Market Opportunities .............................................................................................................. 6 

2.2.1  E-Bicycles as Transportation ......................................................................................................... 7 

2.2.1.1  E-Bicycle Rentals and Sharing .................................................................................................. 8 

2.2.2  Fragmented Marketplace ............................................................................................................... 9 

2.2.3  E-Bicycle Segments ..................................................................................................................... 10 

2.2.3.1  Retrofit Kits ............................................................................................................................. 10 

2.2.3.2  Specialty Uses ........................................................................................................................ 11 

2.2.4  Automotive Manufacturer Interest ................................................................................................. 11 

2.3  Current Market Barriers ..................................................................................................................... 11 

2.3.1  Dealer Network ............................................................................................................................ 12 

2.3.2  Business Model ........................................................................................................................... 12 

2.3.2.1  Importer Model ........................................................................................................................ 13 

2.3.2.2  Designer Model ....................................................................................................................... 14 

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2.3.2.3  Bicycle Manufacturer Model ..................................................................................................... 14 

2.3.3  Geography and Climate ............................................................................................................... 14 

2.3.4  Performance and Cost Issues ....................................................................................................... 15 

2.4  Government Policies .......................................................................................................................... 15 

2.4.1  Municipal Rules for E-Bicycles ..................................................................................................... 15 

2.4.2  European Union ........................................................................................................................... 16 

2.4.2.1  E-Bicycle Tariffs ...................................................................................................................... 16 

2.4.3  China .......................................................................................................................................... 17 

2.5  China’s E-Bicycle Market ................................................................................................................... 17 

2.5.1  Market Consolidation ................................................................................................................... 17 

2.5.2  Safety Issues .............................................................................................................................. 18 

2.5.2.1  Lead-Acid Battery Issues ......................................................................................................... 18 

2.5.3  Chinese Exports .......................................................................................................................... 21 

2.5.4  Electric Bicycle Bans ................................................................................................................... 22 

Section 3 .......................................................................................................................................................... 23 

Technology Issues ........................................................................................................................................... 23 

3.1  Battery Technology ............................................................................................................................ 23 

3.1.1  Sealed Lead-Acid ........................................................................................................................ 23 

3.1.2  Nickel-Metal Hydride .................................................................................................................... 24 

3.1.3  Lithium Ion .................................................................................................................................. 25 

3.1.4  Lithium Polymer ........................................................................................................................... 25 

3.2  Battery Disposal ................................................................................................................................ 25 

3.3  Electric Motors .................................................................................................................................. 25 

3.3.1  Motor Location ............................................................................................................................ 26 

3.3.2  Motor Controllers ......................................................................................................................... 27 

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Section 4 .......................................................................................................................................................... 28 

Key Industry Players ........................................................................................................................................ 28 

4.1  Introduction ....................................................................................................................................... 28 

4.2  Key Market Original Equipment Manufacturers .................................................................................... 28 

4.2.1  Currie Technologies ..................................................................................................................... 28 

4.2.2  Derby Cycle AG ........................................................................................................................... 30 

4.2.3  Jiangsu Xinri E-Vehicle Co., Ltd. .................................................................................................. 31 

4.2.4  Luyuan Electric Vehicle ................................................................................................................ 32 

4.2.5  Panasonic/Sanyo ......................................................................................................................... 33 

4.2.6  Pedego Electric Bicycles .............................................................................................................. 34 

4.2.7  Prodeco Technologies ................................................................................................................. 35 

4.2.8  Stromer Bicycles ......................................................................................................................... 36 

4.2.9  Yadea ......................................................................................................................................... 37 

4.3  Industry Participants .......................................................................................................................... 38 

4.3.1  Accell Group ............................................................................................................................... 38 

4.3.2  Sparta B.V. ................................................................................................................................. 38 

4.3.3  Bionx .......................................................................................................................................... 38 

4.3.4  Bosch E-Bike ............................................................................................................................... 39 

4.3.5  Changzhou Hongdu E-Bicycle Co. ................................................................................................ 40 

4.3.6  e-Moto LLC ................................................................................................................................. 40 

4.3.7  eZee kinetics Technology Co. Ltd. ................................................................................................ 40 

4.3.8  Fallbrook Technologies (NuVinci) ................................................................................................. 40 

4.3.9  Giant Bicycles ............................................................................................................................. 41 

4.3.10  GRACE GmbH & Co. KG .............................................................................................................. 41 

4.3.11  Hero Eco ..................................................................................................................................... 42 

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4.3.12  Hoganas AB ................................................................................................................................ 42 

4.3.13  OHM Cycles, Ltd. ........................................................................................................................ 42 

4.3.14  Shanghai CRANES Electric Vehicle Co., Ltd. ................................................................................ 43 

4.3.15  Shimano ...................................................................................................................................... 43 

4.3.16  SRAM ......................................................................................................................................... 43 

4.3.17  Trek Bicycles ............................................................................................................................... 44 

4.3.18  Yamaha Motor Co., Ltd. ............................................................................................................... 44 

4.4  Battery Suppliers ............................................................................................................................... 44 

4.4.1  AllCell Technologies .................................................................................................................... 44 

4.4.2  Chaowei Power ........................................................................................................................... 45 

4.4.3  NEC ............................................................................................................................................ 45 

4.4.4  Phylion Battery Co., Ltd. .............................................................................................................. 45 

4.4.5  Samsung SDI Co., Ltd. ................................................................................................................ 45 

4.4.6  Sinopoly Battery, Ltd. .................................................................................................................. 46 

4.4.7  Tianneng Power International Ltd. ................................................................................................ 46 

4.5  Other Industry Participants in Asia Pacific .......................................................................................... 46 

Section 5 .......................................................................................................................................................... 49 

Market Forecasts.............................................................................................................................................. 49 

5.1  Overview ........................................................................................................................................... 49 

5.1.1  North America and Latin America ................................................................................................. 51 

5.1.2  Europe ........................................................................................................................................ 52 

5.1.3  Asia Pacific ................................................................................................................................. 53 

5.1.4  The Middle East and Africa .......................................................................................................... 54 

5.2  E-Bicycle Sales by Battery Type ......................................................................................................... 55 

5.3  E-Bicycle Sales by Drivetrain ............................................................................................................. 56 

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5.4  E-Bicycle Sales Revenue ................................................................................................................... 57 

5.5  Conclusions and Recommendations ................................................................................................... 58 

Section 6 .......................................................................................................................................................... 59 

Company Directory .......................................................................................................................................... 59 

Section 7 .......................................................................................................................................................... 63 

Acronym and Abbreviation List ....................................................................................................................... 63 

Section 8 .......................................................................................................................................................... 66 

Table of Contents ............................................................................................................................................. 66 

Section 9 .......................................................................................................................................................... 71 

Table of Charts and Figures ............................................................................................................................. 71 

Section 10 ........................................................................................................................................................ 73 

Scope of Study ................................................................................................................................................. 73 

Sources and Methodology ............................................................................................................................... 73 

Notes ................................................................................................................................................................ 74 

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Section 9 TABLE OF CHARTS AND FIGURES

Chart 1.1  Annual E-Bicycle Sales by Region and Forecast Scenario, World Markets: 2013-2020 ..................... 3 

Chart 2.1  Percentage of Households Owning Bicycles by Region, World Markets: 2011 .................................. 6 

Chart 2.2  Gross Domestic Product and E-Bicycle Sales, China: 2005-2013 .................................................... 8 

Chart 2.3  Lead Consumption by Region, World Markets, 2008-2013.............................................................. 18 

Chart 2.4  Source of Lead Consumption by Technology, China: 2009-2010 .................................................... 19 

Chart 2.5  Lead Production by Source, China: 2011-2012 .............................................................................. 20 

Chart 2.6  Complete E-Bicycle Exports by Region, China: 2011 ..................................................................... 21 

Chart 5.1  Annual E-Bicycle Sales by Forecast Scenario, World Markets: 2013-2020 ...................................... 50 

Chart 5.2  Annual E-Bicycle Sales by Forecast Scenario and Region, North America and Latin America:

2013-2020 ................................................................................................................................... 51 

Chart 5.3  Annual E-Bicycle Sales by Forecast Scenario and Region, Europe: 2013-2020 ............................... 52 

Chart 5.4  Annual E-Bicycle Sales by Forecast Scenario, Asia Pacific: 2013-2020 .......................................... 53 

Chart 5.5  Annual E-Bicycle Sales by Region, Base Scenario, Middle East & Africa: 2013-2020 ...................... 54 

Chart 5.6  Base Annual E-Bicycle Sales with Lithium Ion Batteries by Region, World Markets: 2013-2020 ...... 55 

Chart 5.7  Base Annual E-Bicycle Sales by Motor Design, World Markets: 2013-2020 ..................................... 56 

Chart 5.8  Annual E-Bicycles Sales Revenue by Region, Base Scenario, World Markets: 2013-2020 ............... 57 

Figure 2.1  Bicycle Commuting Growth, United States: 2000-2010 .................................................................... 7 

Figure 2.2  E-Bicycle Designs ........................................................................................................................ 10 

Figure 3.1  Torque Sensor Diagram ............................................................................................................... 27 

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Table 1.1  E-Bicycle Definitions by Region, World Markets ............................................................................. 1 

Table 2.1  E-Bicycle Definitions by Region, World Markets ............................................................................. 4 

Table 2.2  Typical Vehicle Specifications by Country ..................................................................................... 15 

Table 3.1  Battery Type Comparison ............................................................................................................. 23 

Table 3.2  VRLA Module Characteristics of Various Manufacturers, World Markets ......................................... 24 

Table 3.3  E-Bicycle Motor Locations: Advantages and Disadvantages ........................................................... 26 

Table 4.1  Currie Technologies SWOT Analysis ............................................................................................. 29 

Table 4.2  Derby Cycle SWOT Analysis ........................................................................................................ 30 

Table 4.3  Xinri E-Vehicles SWOT Analysis ................................................................................................... 31 

Table 4.4  Luyuan Electric Vehicle SWOT Analysis ........................................................................................ 32 

Table 4.5  Panasonic/Sanyo SWOT Analysis ................................................................................................. 33 

Table 4.6  Pedego SWOT Analysis ............................................................................................................... 34 

Table 4.7  Prodeco Technologies SWOT Analysis ......................................................................................... 35 

Table 4.8  Stromer SWOT Analysis ............................................................................................................... 36 

Table 4.9  Yadea SWOT Analysis ................................................................................................................. 37 

Table 4.10  Asia Pacific Industry Participants .................................................................................................. 47 

Table 5.1  Annual Sales CAGR of Different E-Bicycle Battery Types, World Markets: 2013-2020 ..................... 55 

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Section 10 SCOPE OF STUDY

Navigant Research has prepared this report to provide participants at all levels of the electric bicycle market, including OEMs, suppliers, trade associations, and battery manufacturers, with a study of the world market for electric bicycles. The major objective is to determine the state of the industry and likely future growth of electric bicycle demand. In addition, the report provides a review of major demand drivers, technology, and key industry players within the competitive landscape.

The report’s purpose is not to present an exhaustive technical assessment of the electric bicycles and technologies covered. Rather, it aims to provide a strategic examination from an overall tactical business perspective. Navigant Research strives to identify and examine new market segments to aid readers in the development of their business models. All major world regions are included and the forecast period extends from 2013 through 2020.

SOURCES AND METHODOLOGY

Navigant Research’s industry analysts utilize a variety of research sources in preparing Research Reports. The key component of Navigant Research’s analysis is primary research gained from phone and in-person interviews with industry leaders including executives, engineers, and marketing professionals. Analysts are diligent in ensuring that they speak with representatives from every part of the value chain, including but not limited to technology companies, utilities and other service providers, industry associations, government agencies, and the investment community.

Additional analysis includes secondary research conducted by Navigant Research’s analysts and its staff of research assistants. Where applicable, all secondary research sources are appropriately cited within this report.

These primary and secondary research sources, combined with the analyst’s industry expertise, are synthesized into the qualitative and quantitative analysis presented in Navigant Research’s reports. Great care is taken in making sure that all analysis is well-supported by facts, but where the facts are unknown and assumptions must be made, analysts document their assumptions and are prepared to explain their methodology, both within the body of a report and in direct conversations with clients.

Navigant Research is a market research group whose goal is to present an objective, unbiased view of market opportunities within its coverage areas. Navigant Research is not beholden to any special interests and is thus able to offer clear, actionable advice to help clients succeed in the industry, unfettered by technology hype, political agendas, or emotional factors that are inherent in cleantech markets.

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NOTES

CAGR refers to compound average annual growth rate, using the formula:

CAGR = (End Year Value ÷ Start Year Value)(1/steps) – 1.

CAGRs presented in the tables are for the entire timeframe in the title. Where data for fewer years are given, the CAGR is for the range presented. Where relevant, CAGRs for shorter timeframes may be given as well.

Figures are based on the best estimates available at the time of calculation. Annual revenues, shipments, and sales are based on end-of-year figures unless otherwise noted. All values are expressed in year 2013 U.S. dollars unless otherwise noted. Percentages may not add up to 100 due to rounding.

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Published 1Q 2013

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