Electric Bike Market

Market Overview

The global electric bike market size was valued at USD 48 billion in 2021. It is projected to reach USD 118 billion by 2030, growing at a CAGR of 10.5% during the forecast period (2022-2030).

Electric bikes are bicycles with a built-in electric motor drive system and a battery that produces power for propulsion or propulsion assistance. Electric bikes are available in various configurations, ranging from simple motors to more powerful models. The adoption of government regulations to encourage the use of e-bikes, consumer preference for e-bikes as an effective and environmentally friendly solution, an increase in fuel prices, and a rise in interest in cycling as a sport and recreational activity are some of the factors anticipated to propel market growth.

Market Dynamics

Global Electric Bike Market Drivers

• Implementation of Laws to Encourage the Adoption of Electric Bikes

Due to growing knowledge of the harmful impacts of operating fossil fuel-powered vehicles, governments worldwide are taking steps to decrease their carbon footprints by promoting the usage of electric bikes, cars, and bicycles. Governments are also constructing convenient roads for cycling, encouraging people to adopt bicycles as their primary mode of transportation. Electric bikes, scooters, and motorcycles are becoming increasingly popular as dependable, efficient types of light motor vehicles (LMVs) that help reduce carbon emissions.

To encourage the utilization of these environmentally friendly vehicles, governments from all over the world are also providing tax breaks and other incentives to promote the purchase of electric mobility. For instance, the Indian government announced a plan in June 2019 to reduce the goods and service tax (GST) on electric vehicles from 12 percent to 5 percent to promote their adoption more quickly. In addition, governments in several countries have established battery charging stations and built additional bicycle (express) routes, which have considerably increased the number of people using electric bikes and fueled the market's expansion.

• Increasing Interest in Cycling as a Recreational and Fitness Activity

Consumers have become more health conscious due to work-related stress and sedentary lifestyles. To stay healthy, fit, and active in daily life, the majority of people engage their time engaging in various fitness activities, including cycling, yoga, swimming, and jogging. Cycling is a safe and low-impact activity that offers numerous advantages for both physical and mental health, including increasing endurance, reducing stress, strengthening muscles, and enhancing cardiovascular health. In addition, the increase in consumer preference for recreational and adventure activities has created the demand for electric bikes, thereby fostering the market growth.

Global Electric Bike Market Restraint

• High Cost of E-Bikes

A significant barrier limiting the growth of the e-bike market is the high cost of e-bikes. E-bikes are more expensive than scooters, regular bicycles, or motorbikes due to the battery and technology costs. Hence, buyers believe traditional bikes or scooters offer better performance for the same or less money. Furthermore, the market's expansion is constrained by the high cost of lithium-ion batteries or a motor's drive mechanism.

Global Electric Bike Market Opportunities

• Improvement in Bicycling Infrastructure and Battery Technology

E-bikes are less expensive than cars, don't require a license, and can be operated on the infrastructure already in place for bikers. According to projections, opportunities for market expansion will arise due to rising urbanization and a loss in customer preference for driving due to worsening traffic congestion. Additionally, many governments focus on building e-bike infrastructure, such as bicycle lanes and public charging stations, due to consumers' preference for e-bikes. For example, Sanyo (Japan) set up two solar parking spots in Tokyo where approximately 100 electric bicycles could be charged using solar power. The competition in the e-bike business also pushes technological advancement, expanding the market. For instance, in 2017, the producer of commercial bike racks and bike parking systems, Bikeep, unveiled a smart bicycle rack solution that offers electric bicycle charging. The most well-liked e-bikes will be compatible with the solution. Therefore, it is anticipated that the sum of all these variables would present profitable prospects for global market growth over the forecast period.

Segmental Analysis

The global electric bike market is segmented by product type, battery type, and drive mechanism.

By Product Type Analysis

Based on product type, the global electric bike market is bifurcated into pedelecs, speed pedelecs, throttle-on-demand, and scooters and motorcycles.

The scooter and motorcycle segment is the highest contributor to the market and is estimated to grow at a CAGR of 9.6% during the forecast period. Electric motorcycles significantly reduce carbon dioxide (CO2) emission, carbon footprints, and noise pollution, thereby gaining popularity over internal combustion engine (ICE) powered motorcycles. In addition, companies operating in the industry focus on developing electric scooters with maximum torque and high power to cater to the growing market trend of high speed and long range. Moreover, the increased utilization of electric motorcycles and scooters for day-to-day commutes in populated cities is augmenting the demand for high-power and enhanced efficiency electric bikes, thereby driving the market growth.

Pedelec cycles offer health benefits as the driver has to pedal to move forward, taking the aid from the electric motor. An increase in awareness among the young generation regarding fitness and health is the primary factor driving the pedelec segment's growth. In addition, leading manufacturers focus on developing pedelec electric bikes, which drives the market. For instance, in February 2020, Nexzu Mobility, an end-to-end electric mobility solutions provider, launched three new pedal-assist e-bikes named Roadlark, Aello, and Rompus. The lithium-ion batteries used in Nexzu Mobility's e-cycles have an average longevity of 750 charges. These valuable green vehicles are fully charged in as little as three to four hours.

The throttle option enhances the user's experience, particularly on uphill journeys. In addition, using a throttle lever allows the rider to take more control in turning on/off the bike and to control how much power/battery to use, thus making it easy to ride. Moreover, in the U.S., throttle controllers are legal and highly popular. Therefore, many e-bike manufacturers in the U.S. offer throttle on demand as a primary feature in their electric bike models. For instance, in March 2019, British electric bike and lifestyle brand GoZero Mobility launched two electric bike models named One and Mile. The bikes are enabled with multi-modes of operation such as throttle, peddle, assist, cruise mode, walk, and manual peddles. These factors collectively fuel the expansion of the throttle to help the electric bike market.

By Drive Mechanism Analysis

Based on the drive mechanism, the global electric bike market is bifurcated into hub motor, mid-drive, and others.

The hub motor segment is the highest contributor to the market and is expected to grow at a CAGR of 10% during the forecast period. Change in user preference toward adopting zero-emission vehicles due to increased awareness regarding global warming is anticipated to fuel market growth. In addition, the benefits associated with hub motors, such as hassle-free installation, cost-effectiveness, and better performance, make it a preferred choice for electric bike manufacturers. Moreover, amplified power, high torque, better vehicle handling, and improved vehicle range are some factors that have fostered market growth.

Most European and North American e-bike manufacturers are shifting from hub to mid motors due to the advantages of mid motors, such as smaller size, lighter weight, lesser noise, and seamless integration with bike frames. In addition, the mid-drive motors are designed to make maintenance and service extremely easy. Moreover, mid-drive motors help improve the electric bike's overall handling by better distributing the weight. In turn, it is predicted that this will fuel the mid-drive motor segment's expansion.

By Battery Type Analysis

Based on battery type, the global electric bike market is bifurcated into lead-acid, lithium-ion (Li-ion), and others.

The lithium-ion (Li-ion) segment is the highest contributor to the market and is expected to grow at a CAGR of 9.6% during the forecast period. The popularity of lithium-ion batteries has been rising exponentially, attributed to their lightweight, high capacity, and sharp decline in price in recent years. In addition, the effort of e-bike manufacturers to produce lightweight e-bikes has resulted in the higher adoption of lithium-ion batteries. For instance, in December 2020, an electric vehicle start-up company, Pure EV, announced its collaboration with Central Electro Chemical Research Institute (CECRI) for indigenizing lithium-ion battery technology for electric vehicles. The partners will undertake joint research on the production of battery packs, validation of lithium-ion cells, and addressing the specific requirements to ensure the suitability of advanced batteries for critical performance at the standard operating procedure conditions. To address this, CECRI launched a CSIR Innovation Centre for Next Generation Energy Storage Solutions (ICNGESS) project intending to produce lithium-ion batteries on a 100 MW scale.

The lead-acid segment is the second largest, owing to its low cost and ease of recycling. In addition, the factors such as higher cell voltage and lower price are the primary factors boosting the adoption of lead acid batteries in budget-friendly electric bikes. For instance, in July 2020, RR Global, one of the leading electrical equipment conglomerates, unveiled BGauss A2 and BGauss B8 electric scooters. The lead-acid variant of BGauss A2 is equipped with a fixed 60V VRLA battery pack that can be charged from 0% to 80% in 5-6 hours and 0% to 100% in 7-8 hours. In addition, lead-acid batteries are reliable and lasting with little or no maintenance. Thus, owing to the multiple benefits associated with lead-acid batteries, they are increasingly integrated with electric bikes, which, in turn, fuels market growth.

Regional Analysis

The global electric bike market is bifurcated into four regions, namely North America, Europe, Asia-Pacific, and LAMEA.

Asia-Pacific is the most significant revenue contributor and is expected to grow at a CAGR of 10% during the forecast period. The preference for e-bikes has increased in Asia-Pacific compared to conventional modes of transport, owing to the lightweight, eco-friendly nature, the requirement of less power, and cost-effectiveness. In addition, an increase in initiatives for environmentally friendly vehicles and bikes and the development of related infrastructure from several governments are anticipated to boost the growth of the electric bike market. For instance, in November 2020, the Government of India announced the plan to set up at least one e-charging kiosk at around 69,000 petrol pumps across the country to accelerate the uptake of electric vehicles.

Europe is expected to grow at a CAGR of 10.9%, generating USD 25 billion during the forecast period. Electric bikes are witnessing increased popularity in Europe, as they serve as the preferred mode of commute along with leisure and sports. The European Government and environmental authorities are also passing strict emission rules and laws in response to growing environmental concerns, which are driving up the demand for electric bikes on the continent. For instance, the European Union (EU) has pledged to meet its 20% glasshouse gas reduction goal for the Kyoto Protocol's second phase by 2020.

Market participants have concentrated on growing their presence in LAMEA due to higher living standards and more disposable income, which is anticipated to drive the growth of the electric bike market. For instance, in October 2020, Brazilian EV two-wheeler brand Voltz Motors introduced the Voltz EVS electric street bike. The Voltz EVS mounts a 7 kW (9.52 PS) electric motor that makes it capable of achieving speeds up to 120 km/h and has a 180km range. In addition, new steps are being taken by the governments of various countries to increase the acceptance of electric vehicles, such as steps for building convenient charging stations, which notably contribute to the growth of the electric vehicle market.

Recent Developments

• July 2022 - The Offeror and Accell Group jointly announced that, in connection with the Offeror holding more than 95% of the issued and outstanding shares in Accell Group (the "Shares") following completion of the Offer, Euronext Amsterdam N.V. has consented to the delisting of the shares from Euronext Amsterdam. 
• August 2022 - A strategic alliance between Tech Mahindra and isMobile, a Swedish software firm specializing in field service solutions, was announced. Tech Mahindra is a primary provider of digital transformation, consulting, and business re-engineering services and solutions.