executive summary: electric two-wheel vehicles in asia pacific

Hoonho (Andy) BaeSenior Analyst

Dave HurstSenior Analyst

EXECUTIVE SUMMARY: Electric Two-Wheel Vehicles in Asia Pacific Electric Bicycles, Scooters, and Motorcycles: Market Analysis and Forecasts

NOTE: This document is a free excerpt of a larger report. If you are interested in purchasing the full report, please contact Pike Research at [email protected].

Published 2Q 2012

Electric Two-Wheel Vehicles in Asia Pacific

© 2012 Pike Research LLC. All Rights Reserved. This publication may be used only as expressly permitted by license from Pike Research LLC and may not otherwise be accessed or used, without the express written permission of Pike Research LLC.

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Section 1 EXECUTIVE SUMMARY

1.1 Market Issues

Sales of internal combustion engine (ICE) scooters are strong in China, India, and most Association of Southeast Asian Nations (ASEAN) countries compared to other regions of the world. Two-wheel vehicles (scooters, motorcycles, and bicycles) are a very popular mode of transport due to their fuel efficiency and ease of use in congested traffic. As a result, consumers in Asia Pacific markets are heavily adopting traditional two-wheel vehicles. Largely driven by costs, these vehicles provide a mode of transportation for individuals who may not be able to afford a car yet. In many places, scooters, motorcycles, and bicycles are designed to carry additional cargo and people and, therefore, are more accommodating to families.

China, India, and ASEAN share common features that will encourage the strong growth of two-wheel vehicles, including steady gross domestic product (GDP) growth and moderate two-wheel penetration levels. These nations also have a favorable demographic profile for the adoption of two-wheel vehicles (i.e., a younger population) and an underdeveloped public transport system.

China accounts for the vast majority of the market for electric scooters (e-scooters) at present. This is because scooters (either ICE or electric) are relatively low cost. China is the biggest consumer market for both types of scooters, as well as the biggest supply center for electric versions. It is also the leading country for electric bicycles (e-bicycles) in terms of consumer acceptance and a huge number of manufacturing facilities and suppliers. The e-bicycle market in China has been taking off gradually since 2004, when sales reached about 40,000 units per year. Since then, over 130 million e-bicycles have been sold, or more than 20 million each year. E-bicycles have become the most popular mass-produced alternative vehicle in China.

Much of the current growth of scooter and motorcycle usage in Asia Pacific coincides with the urbanization of the developing world and the increase in family incomes. This trend is the result of people having more money to spend on transportation, as well as the need for transportation to travel to work. Those factors are directly involved with the growth in developing countries in Asia Pacific. Economic prosperity results in a greater number of middle and high income level consumers, which contributes to the growth of the electric two-wheel vehicle market. Since the total cost of ownership (TCO) of e-motorcycles and e-scooters remains low enough to see payback on the vehicle within a year or two of purchase, the market for electric two-wheel vehicles is likely to remain strong in regions with high economic growth rates.

Because two-wheel vehicles are a vital component of the transport system, several new players are entering the untapped electric two-wheel vehicle market with total cost of ownership features appealing to consumers. Asia Pacific is the most competitive market. A plethora of manufacturers are building a wide variety of electric two-wheel vehicles, as well as kits to convert traditional bicycles to e-bicycles.

Electric and traditional two-wheel vehicle manufacturers are paying attention to rising demand for the vehicles. Since the penetration rates in rural areas are lower than urban areas, rural areas are the main business target for ICE two-wheel vehicle manufacturers in



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developing countries. Incumbent players are teaming up with supply chain vendors and components suppliers to initiate market leadership. While electric two-wheel vehicle players are likely to focus on their current main consumers in the urban and semi-urban middle income classes, they are also strengthening marketing to the rural segment in the coming years.

1.2 Technology Issues

In Asia Pacific, two main technologies are used in the e-motorcycle and e-scooter markets: lead-acid and lithium ion (Li-ion) batteries. Lead-acid batteries will be the primary technology used in the Asia Pacific electric two-wheel vehicle markets. Li-ion batteries will account for a smaller (but growing) share of the technology used in e-scooters and e-motorcycles. In China, lead-acid batteries remain the battery of choice for most manufacturers. The growth of lead-acid batteries coincides well with the growth of the e-scooter and e-motorcycle markets. This outlook includes all varieties of lead-acid, including silicone and absorbed glass material (AGM).

Growth in Li-ion storage on Chinese e-scooters and e-motorcycles is largely being driven by the reduction in cost of Li-ion cells in China. As these prices have come down, more manufacturers have begun to offer vehicles with Li-ion batteries as an option. Overall, the Li-ion market in China will represent 10% adoption in e-scooter and 15% in e-motorcycle in 2018, respectively.

Of note, Japan will show far different rate of adoption of Li-ion batteries in both e-scooters and e-motorcycles. Since there is a high level of consumer expectation for the quality and durability of battery performance, manufacturers in Japan are already adopting Li-ion at a higher rate, compared to other Asia Pacific countries. The percentage of e-scooters with Li-ion batteries in Japan will reach 37% in 2018 while the percentage used in e-motorcycles will reach 100% by 2015. In Asia Pacific overall, the use of Li-ion batteries in e-scooters and e-motorcycles is expected to grow at CAGRs of 10.4% and 11.3%, respectively, between 2012 and 2018.

1.3 Market Forecasts

While electric two-wheel vehicles have risen in popularity in China, gasoline two-wheel vehicles still dominate in other Asia Pacific countries. However, given growing demands and the positive market environment for traditional two-wheel vehicles, ASEAN countries will be competitive markets for electric two-wheel vehicles and new players will enter the market. India, Indonesia, and most other Southeast Asian nations are already good markets for ICE scooters and that strength is expected to carry over into the e-scooter market.

India in particular is expected to be a bright spot for e-scooters in the coming years. The focus is on India because electricity is widely available and the population density and urbanization in that country support growth in scooter usage.



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Pike Research segmented several key nations in Asia Pacific for the forecasts (2012-2018) in this report – China, Japan, India, South Korea, Indonesia, Taiwan, Vietnam, Thailand, Malaysia, and Rest of Asia Pacific – by product type: e-scooters, e-motorcycles, and e-bicycles. The key findings in electric two-wheel vehicle market opportunities include:

E-Scooters: China will make up the vast majority of the Asia Pacific e-scooter market (over 15.4 million annual sales in 2018). India will be the second largest e-scooter market selling over 1.1 million units in 2018. With the high proliferation of scooters and high income levels, Taiwan will experience the highest 2012-2018 CAGR (26.7%) in Asia Pacific for e-scooters.

E-Motorcycles: The e-motorcycle market in Asia Pacific is expected to be small compared with e-scooters. Consumers consider e-motorcycles to be a luxury, rather than a main mode of transportation. The cost of e-motorcycles will make them unattainable for many, as inexpensive ICE motorcycles are widely available.

E-Bicycles: India is anticipated to be the second-largest market behind China for e-bicycles by 2018. The country will likely follow demand in China for scooter-style electric bicycles (SSEBs) with sealed lead-acid (SLA) batteries. The growth of cities and traffic congestion in India and the acceptance of two-wheel vehicles as transportation will contribute to this growth.

Pike Research forecasts that annual sales of electric two-wheel vehicles (e-scooters, e-motorcycles, and e-bicycles) will show robust growth and reach more than 65 million units in 2018. In China specifically, annual sales of electric two-wheel vehicles will reach more than 60 million units in 2018 at a CAGR of 6.6%. On a cumulative basis, sales in China will reach more than 355 million units by 2018. Cumulative electric two-wheel vehicle sales in Asia Pacific will reach more than 381 million units in 2018.

Chart 1.1 illustrates annual electric two-wheel vehicles (aggregated sum: e-scooter, e-motorcycle, and e-bicycle) sales by country to show total unit sales volumes in Asia Pacific markets. Since Chinese markets are significantly dominating, Chart 1.2 presents electric two-wheel sales volumes except for China until 2018.



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Chart 1.1 Electric Two-Wheel Vehicle Sales by Country, Asia Pacific: 2012-2018

(Source: Pike Research)

Chart 1.2 Electric Two-Wheel Vehicle Sales by Country, Except for China, Asia Pacific: 2012-2018

(Source: Pike Research)

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10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

2012 2013 2014 2015 2016 2017 2018

Rest of Asia Pacific MalaysiaThailand VietnamTaiwan IndonesiaKorea IndiaJapan China

(Veh

icle

s)

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

2012 2013 2014 2015 2016 2017 2018

Rest of Asia Pacific MalaysiaThailand VietnamTaiwan IndonesiaKorea IndiaJapan

(Veh

icles)



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Section 8 TABLE OF CONTENTS

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

1.1 Market Issues ................................................................................................................................ 1 1.2 Technology Issues ........................................................................................................................ 2 1.3 Market Forecasts .......................................................................................................................... 2

Section 2 ...................................................................................................................................................... 5 Market Issues .............................................................................................................................................. 5

2.1 Definitions ...................................................................................................................................... 5 2.2 Market Drivers ............................................................................................................................... 6

2.2.1 Increasing Urbanization ........................................................................................................... 7 2.2.2 Increasing Income Levels ........................................................................................................ 7 2.2.3 Favorable Demographics ........................................................................................................ 8

2.3 Market Competition ....................................................................................................................... 8 2.4 Consumer Behavior and Major Trends ......................................................................................... 9 2.5 Market Outlook ............................................................................................................................ 11 2.6 Regional Market Issues ............................................................................................................... 12

2.6.1 China ..................................................................................................................................... 12 2.6.1.1 Definition and Specifications ........................................................................................ 12 2.6.1.2 Sales and Production .................................................................................................... 13

2.6.1.2.1. National Volume ....................................................................................................... 13 2.6.1.2.2. Regional Volume ...................................................................................................... 13

2.6.1.3 Major Product Trends ................................................................................................... 13 2.6.1.4 Product Lineup .............................................................................................................. 13 2.6.1.5 Regulations and Safety Issues ..................................................................................... 14

2.6.2 Japan ..................................................................................................................................... 15 2.6.2.1 E-Bicycle Business Models .......................................................................................... 15 2.6.2.2 Fukushima Impact on Consumers ................................................................................ 15 2.6.2.3 E-Bicycle Product Categories and Pricing .................................................................... 16 2.6.2.4 E-Scooter Product Features ......................................................................................... 16 2.6.2.5 Overseas Market Penetration and Cooperation ........................................................... 17

2.6.3 India ....................................................................................................................................... 17 2.6.3.1 Market Status ................................................................................................................ 17 2.6.3.2 Market Competition ....................................................................................................... 18 2.6.3.3 Electric Two-Wheel Vehicles in India ........................................................................... 18

2.6.4 Taiwan ................................................................................................................................... 18 2.6.4.1 Market Features ............................................................................................................ 18 2.6.4.2 Favorable Policies for Electric Two-Wheel Vehicles .................................................... 18 2.6.4.3 Market Dynamics of E-Scooters and E-Bicycles .......................................................... 19

2.6.5 South Korea ........................................................................................................................... 19 2.6.5.1 Market Features ............................................................................................................ 19 2.6.5.2 Retail Market Status ..................................................................................................... 20 2.6.5.3 Korean Players and Development ................................................................................ 20 2.6.5.4 Market Momentum and Business Models for E-Bicycles ............................................. 20

2.6.6 ASEAN .................................................................................................................................. 21 2.6.6.1 Market Snapshot ........................................................................................................... 21 2.6.6.2 Indonesia ...................................................................................................................... 22 2.6.6.3 Thailand ........................................................................................................................ 22



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2.6.6.4 Vietnam ......................................................................................................................... 22 2.6.7 Australia and New Zealand ................................................................................................... 23

Section 3 .................................................................................................................................................... 24 Technology Issues .................................................................................................................................... 24

3.1 Battery Technology ..................................................................................................................... 24 3.1.1 Lithium Ion ............................................................................................................................. 24 3.1.2 Lithium Polymer ..................................................................................................................... 25 3.1.3 Nickel-Metal Hydride ............................................................................................................. 25 3.1.4 Sealed Lead-Acid .................................................................................................................. 26 3.1.5 Valve Regulated Lead-Acid ................................................................................................... 26 3.1.6 Silicone .................................................................................................................................. 27

3.2 Battery Management System ...................................................................................................... 27 3.3 Electric Motors ............................................................................................................................. 27

Section 4 .................................................................................................................................................... 29 Key Industry Players ................................................................................................................................. 29

4.1 Changzhou Hongdu E-Bicycle Co., Ltd. ..................................................................................... 29 4.2 China Motor Corp. (CMC) ........................................................................................................... 29 4.3 Giant Manufacturing Co., Ltd. ..................................................................................................... 29 4.4 Hero Electric ................................................................................................................................ 29 4.5 Honda .......................................................................................................................................... 30 4.6 Industrial Technology Research Institute (ITRI) .......................................................................... 31 4.7 Jiangsu Xinri E-Vehicle Co., Ltd. ................................................................................................. 31 4.8 Kwang Yang Motor Co., Ltd. (KYMCO) ...................................................................................... 31 4.9 Panasonic Corp. / SANYO Electric Co., Ltd. .............................................................................. 32 4.10 Panasonic Cycle Technology Co., Ltd. (PCT) ............................................................................ 32 4.11 Phylion Battery Co., Ltd. ............................................................................................................. 32 4.12 S&T Motors Co., Ltd. ................................................................................................................... 32 4.13 Samyang Optics Co., Ltd. ........................................................................................................... 33 4.14 Sanyang Industry Co., Ltd. (SYM) .............................................................................................. 33 4.15 Shanghai Cranes Electric Vehicle Co., Ltd. ................................................................................ 33 4.16 Shimano Inc. ............................................................................................................................... 33 4.17 Yamaha Motor Co., Ltd. .............................................................................................................. 34 4.18 Zhejiang Luyuan Electric Vehicle Co., Ltd. (Luyuan) .................................................................. 34 4.19 Zongshen Motorcycle .................................................................................................................. 35

Section 5 .................................................................................................................................................... 36 Market Forecasts ....................................................................................................................................... 36

5.1 Introduction .................................................................................................................................. 36 5.2 E-Scooter Sales by Country: 2012-2018 .................................................................................... 36 5.3 E-Motorcycle Sales by Country: 2012-2018 ............................................................................... 39 5.4 E-Bicycle Sales by Country: 2012-2018 ..................................................................................... 42 5.5 E-Motorcycle and E-Scooter Battery Trends: 2012-2018 ........................................................... 45 5.6 E-Bicycle Battery Trends: 2012-2018 ......................................................................................... 47

Section 6 .................................................................................................................................................... 49 Company Directory ................................................................................................................................... 49 Section 7 .................................................................................................................................................... 51 Acronym and Abbreviation List ............................................................................................................... 51 Section 8 .................................................................................................................................................... 54 Table of Contents ...................................................................................................................................... 54 Section 9 .................................................................................................................................................... 57 Table of Charts and Figures..................................................................................................................... 57 Section 10 .................................................................................................................................................. 58 Scope of Study .......................................................................................................................................... 58 Sources and Methodology ....................................................................................................................... 58



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Notes .......................................................................................................................................................... 59



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Section 9 TABLE OF CHARTS AND FIGURES

Chart 1.1 Electric Two-Wheel Vehicle Sales by Country, Asia Pacific: 2012-2018 ................................ 4 Chart 1.2 Electric Two-Wheel Vehicle Sales by Country, Except for China, Asia Pacific: 2012-2018 ... 4 Chart 2.1 Japanese Consumer Preference in Bike Purchasing, by Bike Type, Japan: 2011 ............... 16 Chart 5.1 Electric Scooter Sales by Country, Asia Pacific: 2012-2018 ................................................. 37 Chart 5.2 Electric Scooter Sales by Country, Except for China, Asia Pacific: 2012-2018 .................... 37 Chart 5.3 Cumulative Electric Scooter Sales by Country, Asia Pacific: 2012-2018 .............................. 38 Chart 5.4 Cumulative Electric Scooter Sales by Country, Except for China, Asia Pacific: 2012-2018 ............................................................................................................................. 38 Chart 5.5 Electric Motorcycle Sales by Country, Asia Pacific: 2012-2018 ............................................ 40 Chart 5.6 Electric Motorcycle Sales by Country, Except for China, Asia Pacific: 2012-2018 ............... 40 Chart 5.7 Cumulative Electric Motorcycle Sales by Country, Asia Pacific: 2012-2018 ........................ 41 Chart 5.8 Cumulative Electric Motorcycle Sales by Country, Except for China, Asia Pacific: 2012-2018 ............................................................................................................................. 41 Chart 5.9 Electric Bicycle Sales by Country, Asia Pacific: 2012-2018 .................................................. 43 Chart 5.10 Electric Bicycle Sales by Country, Except for China, Asia Pacific: 2012-2018 ..................... 43 Chart 5.11 Cumulative Electric Bicycle Sales by Country, Asia Pacific: 2012-2018 ............................... 44 Chart 5.12 Cumulative Electric Bicycle Sales by Country, Except for China, Asia Pacific: 2012-2018 . 44 Chart 5.13 Percentage of E-Motorcycles with Li-ion Batteries By Region, Asia Pacific: 2012-2018 ..... 46 Chart 5.14 Percentage of E-Scooters with Li-ion Batteries by Region, Asia Pacific: 2012-2018 ........... 46 Chart 5.15 Percentage of Li-ion Electric Bicycle Sales by Region, Asia Pacific: 2012-2018 ................. 47 Chart 5.16 Percentage of SLA Electric Bicycle Sales by Region, Asia Pacific: 2012-2018 ................... 48

Figure 2.1 Chinese E-Bicycle with Larger Cargo Seats and Delivery Capacity ..................................... 10 Figure 2.2 Two Basic E-Bicycle Types in China (Upper: Pedaling Supplemented E-Bicycle/ Lower: Scooter Type E-Bicycle) ............................................................................................ 12 Figure 2.3 Korean E-Bicycle Unmanned Rental Stand with Card Authentication Systems ................... 21 Figure 3.1 Torque Sensor Diagram ........................................................................................................ 28 Figure 4.1 Honda Smart Home Systems Utilizing Electric Scooters in E-KIZUNA Project .................... 30 Figure 4.2 E-Bicycle Li-ion Chargers and Monitoring Systems Attached on E-Bicycle ......................... 34

Table 2.1 Electric Two-Wheel Vehicle Definition by Region, World Markets: 2012 ................................ 6 Table 2.2 E-Bicycle Models by Driving Range, Charging Time, Product Mix, and Price Level, Japan 16 Table 3.1 Battery Type Comparison ...................................................................................................... 24 Table 3.2 Li-ion Battery Chemistry Characteristics ............................................................................... 25 Table 3.3 Module Characteristics of Various Manufacturers ................................................................ 26



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Section 10 SCOPE OF STUDY

This Pike Research report provides participants at all levels of the two-wheel electric vehicle market including vehicle manufacturers, suppliers, trade associations, and battery providers with a study of the market for two-wheel electric vehicles. The major objective is to determine the state of the industry and the future demand for two-wheel electric vehicles in the major Asia Pacific markets. In addition, this report provides a review of major demand drivers as well as key industry players within the competitive landscape in Asia Pacific. The report’s purpose is not to present an exhaustive technical assessment of the vehicles and technologies covered. Rather, it aims to provide a strategic examination from an overall tactical business perspective. Pike Research strives to identify and examine new market segments to aid readers in the development of their business models. All major Asia Pacific nations are included and the forecast period extends through 2018.

SOURCES AND METHODOLOGY

Pike Research’s industry analysts utilize a variety of research sources in preparing Research Reports. The key component of Pike 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 Pike Research’s analysts and the firm’s 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 Pike 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.

Pike Research is an independent market research firm whose goal is to present an objective, unbiased view of market opportunities within its coverage areas. The firm 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 2012 U.S. dollars unless otherwise noted. Percentages may not add up to 100 due to rounding.



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Published 2Q 2012

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executive summary: electric two-wheel vehicles in asia pacific

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