Breaking the Monopoly of Trillion-yuan Giants in the US and Japan, a Core Part Supplier for Guangzhou Ebikes Secures Hundreds of Millions in Financing | Exclusive Report by 36Kr

Author | Zhang Ziyi

Editor | Yuan Silai

36Kr learned that Luofandi Intelligent Technology (hereinafter referred to as "Luofandi"), a core component supplier for intelligent short - distance travel, has completed a nearly 100 million yuan Series B financing. The investors include Guangzhou Industrial Investment, Dice Investment (an investment platform under Hunan Iron and Steel Group), and Fortune Capital. The funds from this round of financing will be used for overseas market operations, talent recruitment, and large - scale mass production of new products.

Luofandi was established in 2012. The company focuses on the R & D and production of internal transmissions and has developed products such as electronically controlled internal transmissions, motor - integrated internal transmissions (MEGS), mechanical automatic internal transmissions, manual internal transmissions, and intelligent vehicle locks.

In recent years, Ebikes have become a popular cycling item in Europe and the United States, giving rise to a market worth hundreds of billions. Data provided by Dashu Cross - border shows that the global Ebike market size is expected to reach $35 billion in 2024 and is projected to reach $62.25 billion by 2030, with the market growing at a compound annual growth rate of slightly less than 10% during the forecast period.

However, like bicycles, the core components of Ebikes are mainly monopolized by overseas manufacturers. Take transmissions as an example. 95% of the transmissions in the Chinese market come from two manufacturers: Shimano of Japan and SRAM of the United States.

There are two types of transmissions: internal and external. The current mainstream transmission in the market is the external transmission. It shifts gears through the transmission of gears and chains and is also known as a mechanical transmission. External transmissions require users to clean and oil the gears and chains for daily maintenance.

It is worth noting that the maintenance cost of cycling products equipped with external transmissions is extremely high in Europe and the United States. In Germany, it costs 100 euros to repair an external transmission once, and on average, it needs to be maintained 1 - 2 times a month.

The internal transmission is installed inside the hub with a closed internal structure of the cycling product, which is protected from the erosion of the physical environment. Its failure probability is much lower than that of the external transmission, it has a long service life, and its maintenance is relatively simple. It achieves speed changes through the internal planetary gear structure, and the meshing accuracy of the gears during the speed - changing process is high, making the speed change precise and stable.

36Kr learned that compared with traditional bicycles, Ebikes have stronger requirements for the functions and performance of internal transmissions. The products of the traditional transmission giant Shimano are mainly suitable for the bicycle field and cannot fully meet the needs of Ebike manufacturers.

Luofandi started the R & D of automatic transmissions in 2014 and customized and developed an electronically controlled automatic internal transmission suitable for Ebikes in 2021. At the Shanghai Bicycle Exhibition last May, Luofandi jointly developed the first motor - integrated internal transmission product with Ainaida. This is an automatic three - speed internal transmission integrated with a hub motor and is also a scarce product integrating a motor and an internal transmission in the market. It has now achieved mass production.

Yan Pu, the Executive President and CFO of Luofandi, introduced that this product can enable high - level integration of Ebikes. By combining a hub motor, a transmission, and a transmission belt, it can significantly reduce the maintenance cost. Through torque and speed sensors and combined with AI algorithms, it can precisely coordinate the output ratio of human power and electric power and automatically shift to the most suitable gear for the rider and the terrain. The electronic speed - changing system can achieve automatic up - shifting on uphill slopes. During the riding process, the transmission can automatically up - shift and reduce the motor output, increasing the battery life by 30%. It can also achieve automatic down - shifting. The internal transmission has a high anti - torsion capacity of up to 200NM, extending its service life. When the product is adapted to a standard frame, its weight is only 3.9kg, much lighter than most hub motors, ensuring the overall portability of the vehicle.

Luofandi told 36Kr that on March 3 this year, the China National Light Industry Council (a vice - ministerial - level unit) issued a scientific and technological achievement appraisal certificate to Luofandi, stating that its "High - torque Automatic Internal Transmission for Electric - assisted Bicycles" has reached the international advanced level, indicating that this technology has significant competitiveness globally, breaks through the technological monopoly of Europe and the United States, and reaches the forefront of international similar technologies. This appraisal result is one of the core materials for promoting the transformation of relevant technologies into industry standards and represents that Luofandi is eligible to participate in the evaluation of national - level awards such as the National Science and Technology Progress Award.

The hub motor is integrated into the wheel and can be divided into front - drive and rear - drive. The technology is mature, and the overall cost is relatively low. It is mostly used in mid - to low - end Ebike models. Since the internal transmission needs to be installed on the rear hub, if an Ebike manufacturer uses an internal transmission, it must use a mid - drive motor (mid - drive motors are mostly used in mid - to high - end Ebike models). Luofandi's automatic three - speed internal transmission product integrated with a hub motor can be equipped with a hub motor and a belt transmission at the same time, reducing both the manufacturer's cost and the consumer's maintenance cost.

In addition, Luofandi is also developing a mid - drive motor internal transmission product.

Yan Pu told 36Kr: "After the mid - drive motor is integrated with the internal transmission, the power and transmission systems are deeply integrated at the mechanical and control levels, complementing each other, and the riding experience will be better."

36Kr learned that the mid - drive motor is installed at the bottom bracket position, which makes the vehicle's center of gravity lower and more concentrated in the middle of the vehicle body. Compared with the hub motor, it has stronger power, better handling stability, can optimize the motor output power, and its concealed installation position makes the maintenance cost lower. After the industry leader Bosch launched its mid - drive motor product, many Ebike manufacturers have successively launched relevant products.

In Germany, an important Ebike market, the installation volume of mid - drive motors and hub motors has reached a 5:5 split. eMTBs and eCargos mostly use mid - drive motors due to their high - power and high - performance requirements.

In addition to internal transmission products, Luofandi's most commercially successful product is its intelligent vehicle lock.

Luofandi introduced that the company's intelligent lock product has an anti - lock function, which is safer and more stable. It avoids the safety problem of the lock getting stuck after automatically locking when the electronic structure is unstable or an error signal is received. After the intelligent lock is integrated into the hub, the theft rate of Ebikes or scooters can be reduced.

"Currently, most Ebikes are not equipped with locks when they leave the factory, and the situation of bike theft in Europe is very serious. Leading companies in the Ebike field, including Bosch, are all trying to improve anti - theft capabilities. Our intelligent lock is integrated with the wheel. To steal the bike, one almost has to remove the wheel, which greatly increases the difficulty of theft." Yan Pu told 36Kr.

Currently, Luofandi's intelligent vehicle lock has become the core supplier for many domestic and overseas travel brands.

The global Ebike market is developing rapidly. The power and transmission systems represented by the three - electric systems and transmissions are not only the most important cost components of Ebikes but also one of the profit - concentrated points in the industry. Luofandi can break through the technological barriers of overseas transmission manufacturers in the field of internal transmission products and is expected to explore a broader market in the future.