The E-bike that both American agents and Africans are riding, with the industrial chain behind it ranking first in Shenzhen | Focus Analysis

Author | Zhang Ziyi

Editor | Yuan Silai

In the border area between San Diego, USA and Tijuana, fresh scenes are unfolding. American agents responsible for search and rescue work are riding E-bikes to gallop in the valleys, patrol the borders, and even ride to rescue trapped immigrants in special moments.

The Border Patrol in San Diego obtained these E-bikes four years ago, and at that time, no one realized that they could be used in patrols.

As early as two years ago, the staff of the Mozambique National Wildlife Park found that riding E-bikes for patrols is very useful because they are concealed, lightweight, and quiet, will not disturb the animals, are convenient for catching poachers, and can be driven on a variety of terrains. The new energy feature of zero emissions also greatly reduces the impact on the environment.

It can be seen that the usage scenarios of E-bikes overseas are still being continuously explored. E-bikes, which are little known in China, have been popular in overseas markets for many years. In Japan, the birthplace of E-bikes, its penetration rate has reached as high as 45%.

Although the United States started late and has a high national consumption level, the market potential is huge. According to Circana's retail tracking service, the sales of E-bikes in the United States reached a peak of $903 million in 2022. Last year, the sales volume decreased, but after entering 2024, it increased by 4%.

The popularity of E-bikes in the European market is due to the prevalence of cycling culture. Especially in Western Europe, countries such as the Netherlands and Belgium also attach great importance to the cycling environment in their development plans. Cities have reserved reasonable cycling intervals, providing a good foundation for the popularity of E-bikes.

More importantly, both European and American governments are striving to promote the reform of travel modes and ease urban traffic. The United States, the United Kingdom, France, Sweden, and Canada have all provided subsidy policies for E-bikes. In addition to new energy vehicles, E-bikes, which are more lightweight and have a relatively lower price, have become the new favorite of many young people in Europe and the United States.

The popularity and potential of E-bikes overseas have attracted many E-bike enterprises, and top investment institutions are betting on them.

Take the United States as an example. Data provided by SEVENS, an overseas brand operator, shows that there were only 100 E-bike brands in the US market in 2021, and it doubled to 200 in 2022. At the beginning of last year, the majority of these brands were from Chinese manufacturers, and many of them were produced by cross-border e-commerce practitioners in Bantian, Shenzhen.

This has also led to a serious backlog of E-bike inventory in the past two years and intense competition in a large number of mid-to-low-end E-bike products, and the industry has experienced a wave of reshuffling. While the track returns to rationality, the overseas market of E-bikes still has extraordinary charm.

01 The Trend Driven by Policies

According to foreign media reports, the California Air Resources Board has launched the California E-bike Incentive Program, with a single coupon amount of $2,000, to encourage low-income California residents to purchase E-bikes.

Kendra Ramsey, executive director of the California Bicycle Coalition, said in a media interview that many low-income groups own old cars with a high pollution rate. Many more people don't even have a car, so E-bikes become a means of transportation.

E-bikes can be seen everywhere in California, have become a feature of the city's roads, and are becoming increasingly popular.

Not only in California, but many environmentally conscious states and local governments in the United States have begun to subsidize E-bikes just like they subsidize electric vehicles. States such as Colorado and Hawaii provide subsidies to residents who meet the income requirements. The E-bike subsidy programs in Denver and Connecticut are very popular among bicycle riders, so much so that the funds are used up within a few days.

Subsidies are the direct reason for the increase in the use of E-bikes in the US market. A paper published last year by researchers at the University of California, Davis, found that people who used local and state tax rebate programs to buy E-bikes said they rode bicycles more frequently after the purchase. Nearly 40% of respondents said that in the long run, they use E-bikes to replace a car trip at least once a week - this shift could significantly reduce carbon emissions.

Not only in the United States, but Shrewsbury in the UK has also recently launched an E-bike subscription plan. Local residents have the opportunity to try out an electric bicycle for 12 months at a price of less than £3 per week. The subscription includes a helmet and bike lock, as well as an optional bicycle luggage bag and child seat. The launch of this subscription plan aims to encourage people to travel in a more environmentally friendly way.

The cycling culture in Europe is strong, and while the cycling infrastructure is perfect, the age distribution of cycling enthusiasts is even more extensive. Moreover, there are many mountainous areas and steep terrain in Europe as a whole, and the market has a greater demand for E-bikes.

Since the beginning of the decade, European countries have continuously allocated funds to support the development of E-bikes, and the penetration rate of E-bikes has been greatly improved.

According to the statistics of Shangcheng Investment, the sales volume of E-bikes in Europe was about 4.537 million in 2020, with a growth rate of more than 30%. It is estimated that the penetration rate will increase to 42.6% by 2025.

And the origin of these E-bikes is basically from China.

02 The Prospectors in the Hundred-Billion Market

In the supply chain of E-bikes, China has an unparalleled advantage. China is the largest country in bicycle manufacturing and export. The global annual output of bicycles is about 100 million, and China accounts for about 60% of the global output. The traditional bicycle supply chain is quite mature.

However, the core technology in E-bikes is its electric power assist system, which examines key indicators such as motor efficiency, torque, transmission speed ratio, torque control and feedback accuracy, and is a key factor for the good ride of E-bikes. In an E-bike vehicle, the cost of the electric power assist system alone accounts for 25-30%.

The electric power assist system market has long been occupied by established overseas manufacturers, and the industry presents a situation of one superpower and multiple strong ones. Bosch dominates, and Shimano also occupies a place with its one-stop solution of shifting, braking, and power assist systems.

Domestic manufacturers basically only produce and do not independently research and develop the electric power assist system. This also means that the production barrier of E-bikes is relatively low, and the difficulty of entering the new field is relatively small. Even in the eyes of some investors, E-bikes are an integration of public version products + technology + Bosch motors, and the threshold is not high.

Therefore, the E-bike market is also quite fragmented. From the perspective of the online consumption pattern, data from SellerSprite shows that the market share of the top brands in the German Amazon E-Bike industry is about 10%, and the share of the top five is less than 50%, which is still in the early stage of development and relatively fragmented. In the US market, the market share of the top brand Heybike is about 15-20%, and the market share of other brands is less than 10%. The pattern is also relatively fragmented, and an absolute leading brand has not yet been formed.

Chinese enterprises targeting E-bikes, after experiencing a wave of competition and reshuffling of mid-to-low-end products, have gradually realized that patchwork products are destined to be eliminated, and only in different segmented scenarios and fields can there be new vitality.

Many E-bike manufacturers will choose to independently research and develop + open private molds, redesign the circuit "routing" in the bicycle and redesign the bicycle structure.

For example, the manufacturer Tezaus, in order to meet the needs of simplicity, lightweight, and high integration of the entire vehicle, chooses to independently research and develop the mid-mounted motor and algorithm system. DJI directly enters the field of electric power assist systems and launched DJI Avinox in July this year, which is an electric power assist system for high-end E-bike vehicle brands worldwide.

In fact, only when Chinese manufacturers participate in the research, development and production of the core components and core technologies of E-bikes, and make better use of the unique advantages of the Chinese supply chain, can they be more likely to seize the still-growing overseas market of E-bikes.

Data provided by Dashu Cross-border shows that the global E-bike market size is expected to be $35 billion in 2024, and is expected to reach $62.25 billion by 2030. The market will grow at a compound annual growth rate of slightly less than 10% during the forecast period.

E-bikes traveling along the US border and used to catch poachers are just an epitome of their continuous popularity in Europe and the United States. The hundred-billion market has just begun.