Electric Bicycle Market

Market Overview

The global electric bicycle market size was valued at USD 36.1 billion in 2023 and is projected to reach a value of USD 110.2 billion by 2032, registering a CAGR of 13.2% during the forecast period 2024-2032. The growing awareness of the health benefits of e-bike use, such as enhanced fitness and less inactive lifestyles, is boosting consumer interest and increasing the electric bicycle market share. 

Electric bicycles, often known as e-bikes, are bicycles with an electric motor and a battery to aid the user in pedaling. Electric components make cycling easier and more efficient, making it a popular choice for commuting, recreational riding, and even specific sports. Globally, the use and availability of e-bikes are growing rapidly, thanks to swiftly rechargeable batteries, lightweight motors, and technological breakthroughs in bicycle components. Companies are diversifying their product portfolios through innovations and investments in connection applications such as V2X (vehicle-to-everything), which can protect and warn bicycle riders of potential risks and problems. For example, Tome, a software firm, worked with SAE Industry Technologies and nine other members to create the bicycle-to-vehicle (B2V) communication standard. As a result, increased bicycle connectivity measures are predicted to boost the electric bicycle market trend.

Highlights

• Mid Drive occupies the major share of the market by motor type.
• Lithium-ion is the most popular battery type.
• Sports is the most common application of the market.
• Urban consumers generate the highest revenue share in the market.
• 250W and less than 250W are significant contributors to the market based on power output.

Market Dynamics

Market Drivers

Urbanization and Traffic Congestions

As cities worldwide continue to suffer fast population development and urbanization, transportation congestion becomes a major issue. Cities are dealing with rising automotive traffic, which leads to longer commute times, environmental pollution, and a lower overall quality of life for urban residents. In 2023, the global urbanization rate was 57%, with North America, Latin America, and the Caribbean experiencing the highest levels of urbanization. The United Nations (UN) predicts that urbanization will reach two-thirds of the world's population by 2050. According to the 2023 TomTom Traffic Index, London is the world's most congested city, with an average travel time of 37 minutes and 20 seconds for 10 kilometers. London's Scrappage Scheme encourages individuals to turn in their outdated vehicles for electric bikes, scooters, and public transportation. The scheme is valued at £110 million. 

 E-bikes can assist in reducing traffic congestion, which is a significant benefit. Congestion costs drivers in London, Paris, and Brussels an estimated 130-150 hours of work per year. Similarly, TomTom ranks Bengaluru, India, as the world's sixth most congested city in 2023. Commuters in Bengaluru spend 132 hours (5 days and 12 hours) traveling during rush hour at an average speed of 18 kmph. Bangalore is also the most crowded city in India and Asia. Further, According to the World Health Organization (WHO), urban air pollution causes around 4.2 million premature deaths yearly. This figure highlights the negative influence of traditional modes of transportation on air quality in urban areas. According to a study by the International Transport Forum (ITF), traffic congestion is both an annoyance and a substantial economic burden. In 2023, traffic congestion is expected to cost more than €5 billion. Traffic congestion and accompanying delays can cost the US economy about USD 120 billion annually.

In response to rising traffic congestion and related economic and environmental costs, urban inhabitants are increasingly looking for alternate and more efficient forms of transit. Electric bicycles offer a realistic alternative for getting around congested urban areas. Their ability to navigate through traffic, use bike lanes, and avoid gridlocked streets makes them an appealing option for urban commuters.

Market Restraints

Limited Charging Infrastructure

The availability and accessibility of charging infrastructure are critical to adopting electric bikes. The absence of a well-developed charging network can be a significant barrier, affecting the convenience and confidence of electric bicycle riders. China, the world's largest market for electric bicycles, has faced charging infrastructure issues. While the country has many electric bicycles, charging infrastructure is limited, particularly in rural and less developed urban regions. This creates challenges for users, who may face constraints in charging alternatives, hurting their overall experience. Due to high market demand, China's electric bicycle exports will rise by 20% in 2023. 

Despite widespread acceptance, the availability of charging infrastructure varies by region, affecting the overall user experience and leading to issues like range anxiety. McKinsey studied the worldwide electric vehicle market, including electric bicycles, and emphasized the significance of developing a robust charging infrastructure. The paper underlined that a lack of charging stations may function as a barrier to adopting electric cars, including electric bicycles, by restricting consumers' desire to transition from traditional vehicles.

Market Opportunity

Government Incentives and Support

Governments worldwide are rapidly recognizing the potential of electric bicycles to alleviate urban mobility issues while lowering emissions. Opportunities exist in leveraging government incentives, subsidies, and policy assistance to increase the use of electric bicycles. The European Union has actively promoted sustainable mobility, such as electric bicycles, through various incentives and regulatory initiatives. In nations such as Germany and France, governments offer financial incentives to encourage the use of electric bicycles. For example, in Germany, owners of electric bicycles can receive subsidies that cover a portion of the purchase price, making these bikes more accessible. Residents can receive up to 50% of the purchase price of an e-bike, including VAT, from the European Environmental Fund beginning in February 2023. This amounts to a maximum of €500. 

China's government has adopted several initiatives to improve clean and efficient transportation. The Chinese government promotes the usage of e-bikes through laws and other initiatives. The government's encouragement of e-bikes is consistent with its environmental aims, such as the National Climate Change Program and the 13th Five-Year Plan. In some cities, electric bicycle owners can receive subsidies, and rules exist to limit the usage of traditional motorcycles in favor of electric bicycles to minimize pollution. The opportunity lies in increased collaboration between governments and business stakeholders to improve and extend incentive schemes. Governments should consider further actions to improve the broader ecosystem, such as tax credits, lower import taxes on electric bicycle components, and infrastructure development.

Regional Analysis

The global electric bicycle market analysis is conducted in North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

Asia-Pacific's electric bicycle market share is estimated to grow at a CAGR of 13.4% over the forecast period. Asia-Pacific is likely to lead the electric bicycle market growth over the forecast period Due to the region's significant sales of electric bicycles. Factors contributing to the region's market domination include substantial cycling infrastructure in developed and developing countries, like China and Japan, significant traffic and public transit congestion, and stricter pollution laws for gasoline motorcycles.

Europe is anticipated to exhibit a CAGR of 13.8% over the forecast period. Germany dominates Europe, followed by France and Italy. E-bikes are a common form of transportation in Germany. Some elements boosting e-bicycle market sales are the product's revolutionary character, fully integrated batteries and drives, appealing designs, and use of high-quality materials. 

Further, in May 2023, France stated that it would invest two billion euros in the construction of bike infrastructure around the country. This is the seventh time the French government has requested initiatives to boost cycling. The program is part of the country's cycling and walking plan from 2023 to 2027, and it will get a 125 million-euro budget. By April 2024, this budget is predicted to have doubled, allowing for even more projects.

The North American electric bicycle industry has grown significantly due to increased awareness of sustainable mobility, a trend toward eco-friendly commuting options, and developments in electric bike technology. Cities around North America have seen the rise of electric bike-sharing initiatives. Data from August 2022 to January 2023 reveals that electric bikes can improve social justice in the transportation network. Despite the system's issues, Lyft and the City announced plans in November 2023 to quadruple the number of electric bikes in the fleet and electrify 20% of stations in the coming years. These projects help increase the number of electric bikes used in cities.

The Middle East and Africa account for a moderate share of the market. Dubai's Roads and Transport Authority (RTA) launched a prototype e-bike in December 2023, aiming to encourage delivery companies to switch to eco-friendly electric bikes. This effort seeks to increase and improve the breadth of present and future commercial transportation services and speed the shift towards zero-emission transportation methods.

Segmental Analysis

The global electric bicycle industry is segmented based on motor type, battery type, application, consumer segment, and power output.

The market is further segmented by motor type into Hub Motor and Mid Drive.

Mid Drive occupies a significant share of the market. Mid-drive or central or crank motors are directly between the bike's bottom bracket pedals. This design allows the engine to power the bike via the chain and gears, giving it a mechanical edge and exploiting its existing transmission. Mid-drive motors are often used in electric mountain bikes (e-MTBs) and high-performance electric bicycles suited for rough terrain. Their ability to use the bike's gearing system makes them excellent for riders who require a versatile and powerful electric aid, particularly when climbing steep hills or traversing diverse terrain. Hub motors are built into an electric bicycle's front or rear wheel hubs. These motors are distinguished by their simplicity and direct integration with the wheel, resulting in a straightforward and efficient propelling system. Hub motors come in two types: front hub motors and rear hub motors. Front hub motors are mounted on the front wheel, whereas rear hub motors are integrated into the rear wheel.

The market is sub-segmented into lead-acid and lithium-ion based on battery type.

Lithium-ion is the most popular battery type. Lithium-ion batteries are a more modern and popular battery technology. They use lithium ions as the electrochemical reaction's main component, resulting in a high energy density and an excellent power-to-weight ratio. Lithium-ion batteries are widely utilized in mid-range to high-end electric bicycles, where riders value features like extended range, less weight, and advanced technology. They are commonly used in urban commuter e-bikes, electric mountain bikes, and performance-oriented variants. Lead acid batteries are an old and well-known type of rechargeable battery technology. They have lead dioxide as the positive plate, sponge lead as the negative plate, and a sulfuric acid solution as the electrolyte. Lead acid batteries have been widely employed for various applications, including electric bicycles. Lead acid batteries are commonly used in entry-level or low-priced electric bicycles, where cost and simplicity outweigh the desire for additional features and longer-range capabilities.

The market can be bifurcated by application into Sports, Fitness, and Daily Commute.

Sports is the most common application of the market. Electric bicycles built for sports are primarily focused on recreational and performance riding. These bikes typically have strong frames, improved suspension systems, and powerful motors, making them ideal for off-road adventures, trail riding, or competitive electric mountain biking. Sports e-bikes may have specialized characteristics, including bigger tires, aggressive tread patterns, and superior shock absorption technology to improve performance in different terrains. Electric bicycles built for daily commuting prioritize utility, comfort, and efficiency for everyday mobility. These bikes are ideal for urban situations, allowing users to handle traffic quickly, avoid congestion, and reach their destinations.

Based on consumer segments, the market is fragmented into Urban and rural.

Urban consumers generate the highest revenue share in the market. The urban customer category in the electric bicycle market includes those who live in densely populated urban areas, cities, or metropolitan regions. Urban electric bicycles are designed to meet the unique needs and challenges of city living, providing answers for daily commuting, traffic management, and last-mile transportation gaps. The rural consumer segment of the electric bicycle market includes those who live in less densely populated areas, rural regions, or areas with open landscapes. Rural electric bicycles are developed to meet riders' specific needs in these environments, providing options for pleasure, outdoor exploration, and long-distance transit. Country e-bikes may have more robust frames, bigger tires, and improved suspension systems to withstand a variety of terrains, such as gravel walks, dirt roads, and country trails. 

The market is classified by power output into 250W, Less than 250W, and Above 250W.

250W and less than 250W are significant contributors to the market. This power output categorization in the electric bicycle market refers to the maximum power output of the bike's electric motor. Electric bicycles with a power output of 250W or less come under regulatory limits in many regions, allowing them to meet specific legal definitions of e-bikes. These bikes are intended for various purposes, including urban commuting, recreational riding, and fitness. Electric bicycles in this category follow laws governing maximum power output for e-bikes. This compliance frequently results in fewer regulatory constraints, making these bikes more available to a larger audience. Electric bicycles with power outputs over 250W surpass the regulatory limits established for many ordinary e-bikes. These bikes are intended for riders who value faster speeds, improved performance, and more power when facing rugged terrain or strenuous riding conditions. Some above-250W e-bikes may have changeable power levels, allowing users to tailor the level of assistance to their preferences and the terrain.

Impact of covid-19

Despite the COVID-19 pandemic, the electric bicycle industry is one of the few sectors that has seen significant development in recent years. When it comes to the global market, the impact of COVID-19 has been positive, with global e-bike sales increasing throughout the lockdown period. Even after the lockdowns, people remain cautious and prefer not to use public transit or mobility-sharing services for commuting purposes. During the epidemic, the e-bike is believed to be a simple, inexpensive, and safer mode of transportation. The adoption of electric bicycles has increased exponentially, and they have displaced non-motorized bikes in many places.

Furthermore, due to government restrictions on public transportation due to social-distancing guidelines, commuters are turning to electric bicycles as a mode of daily transportation. According to the New York Times, bike sales in the United States increased by 85 % in March 2020. As a result, the electric bike industry is poised for greater growth post-Covid-19.

Recent Developments

December 2023- Gazelle Ultimate T10 Review: A Classy Commuter with Dutch Bloodlines. With a strong history in the cycling business, the Gazelle Ultimate T10 stands up to its predecessors' expectations.

August 2023- Riese and Müller will move to reusable packaging for e-bikes and minor components.

February 2024- Yamaha Motor Co., Ltd. (Tokyo: 7272) announced its recent investment in World of River Limited, Inc. (hereafter River), an Indian company that develops and distributes electric scooters. This investment is part of River's Series B round of funding via third-party allotment.