Electric Bike Market

Market Overview

The global electric bike market revenue was valued at USD 30.50 billion in 2022. It is estimated to reach USD 84.98 billion by 2031, growing at a CAGR of 12.06% during the forecast period (2023–2031). A soaring awareness of environmental issues like air pollution and climate change has prompted consumers to seek eco-friendly alternatives. E-bikes, which emit no pollutants and reduce the carbon footprint, are an attractive option for eco-friendly, boosting market expansion.

E-bike, which stands for "electric bicycle," is a two-wheeled vehicle with an electric motor that assists the user in pedaling. These revolutionary bicycles are designed to combine the convenience of motorized transportation with the health benefits and environmental friendliness of traditional cycling. E-bikes utilize rechargeable batteries and are typically motorized up to 16 to 20 miles per hour. High-powered variations can typically reach speeds of greater than 28 miles per hour.

E-bikes are available in various designs, including city commuters, mountain bikes, and folding bikes, to meet the preferences and requirements of an extensive range of users. There are numerous e-bikes on the market, but they typically fall into two categories, i.e., pedal-power (i.e., pedelecs) and e-bikes with throttles that incorporate moped-style functionality. Both retain the ability for the rider to pedal and, therefore, are not electric motorcycles.

Market Dynamics

Market Drivers

Growing Demand for Eco-Friendly Transportation

As environmental and health concerns continue to rise due to rising emission levels, governments and international organizations are enacting stringent emission standards to reduce carbon emissions. Due to this, international organizations worldwide are implementing stringent vehicle standards. For instance, in January 2020, the European Union implemented Regulation (EU) 2019/631, establishing CO2 emission performance norms for new passenger cars and light-duty vans. Due to these factors, the average CO2 emissions of newly registered passenger vehicles in Europe have declined by 12% compared to the last year, and the proportion of electric vehicles has tripled.

Additionally, e-bikes are an excellent mode of transportation, particularly for recreational activities, as they combine the enjoyment of cycling with the practicality of an automobile. These bicycles also enable riders to traverse rugged terrains that would be difficult to traverse without an electric motor. During the COVID-19 pandemic, individuals sought secure and convenient modes of transportation, leading to a significant surge in the market for electric bike. This growth can be ascribed to the widespread use of e-bikes for daily commuting. These factors are making e-bikes popular worldwide.

Growing Fuel Prices

The surge in fuel prices over the past decade has resulted in an upsurge in bicycle use as a mode of daily transportation. The increase in fuel prices is due to a soar in crude oil prices, primarily controlled by the Organization of Petroleum Exporting Countries (OPEC) nations. For instance, in September 2021, rising vehicle demand and supply shortages drove crude oil prices to USD 79 per barrel. Future crude oil supply constraints are anticipated to continue driving up prices.

Furthermore, the government is actively developing the charging infrastructure required for adopting electric bicycles. In addition, the federations offer overall cost savings for e-bikes by providing incentives, programs, and subsidies. As a result, consumers are more inclined to use electric bicycles due to their advantages and eco-friendliness. Therefore, an increase in fuel prices is anticipated to increase consumer preference for electric bicycles, thereby boosting the growth of the market.

Market Restraint

High Initial Buying Cost 

E-bikes are becoming more expensive than normal motorbikes due to design, wiring, motor or mini engine expenses, and battery power. The cost of an e-bike is majorly dependent on its grade and quality. The average price can range from about USD 1,500 to USD 7,900. In addition, the average price of a mountain e-bike is about USD 4,150, and the average price can range from approximately USD 1,200 up to USD 9,000. The high costs of new e-bike batteries and replacement of the same are also hindering the market's expansion, as people prefer spending less money on buying new batteries for e-bikes.

Market Opportunities

Trend of Connected e-bikes

Connected e-bikes are intelligent, omniscient bicycles that can communicate vital information regarding their condition and use. Occasionally, connected bicycles can receive information and commands remotely. Connected e-bike systems allow both data gathering and data mining. Therefore, companies are developing connected solutions, such as Specialized Bicycle Components Inc (US), whose product offerings include mission control and ride features. For instance, Japan-based Shimano Inc. has developed an e-tube ride feature.

In addition to e-bikes, manufacturers focus on developing advanced technologies and customer support services. According to a report by the United Nations, 70% of the world's population will reside in cities by 2050, resulting in increased traffic congestion. Emerging megatrends include urbanization, digitalization, and sustainability. Therefore, the trend toward connected e-bikes would present an opportunity for the electric bike market growth.

Regional Analysis

Based on region, the global electric bike market is bifurcated into North America, Europe, Asia-Pacific, and Rest of the World.

Asia-Pacific's electric bike industry share is anticipated to exhibit a CAGR of 11.55% during the forecast period. China, Japan, and Indonesia accounted for significant global unit sales over the past few years. The Asia-Pacific region is undergoing numerous technological advancements and an ever-evolving infrastructure for charging electric vehicles. Numerous prominent companies, such as Yamaha Motor Company, Yadea Group Holdings Ltd., and Aima Technology Group Co. Ltd., are in the region. The rising demand for environmentally favorable transportation and the expansion of government initiatives are anticipated to continue to fuel growth.

Additionally, government initiatives and incentives are major in adopting electric bikes in the Asia-Pacific region. For instance, the Delhi government plans to promote electric bikes in India by offering financial incentives under the Delhi EV policy. For electric cycles, it plans to subsidize 25% of the cycle's cost (up to Rs 5,500) and give a fixed additional incentive of Rs 2,000 on the first 10,000 electric cycles. A purchase incentive of 33% of the price, up to Rs 15,000 per cargo e-bike, will be given to buyers of the first 10,000 cargo e-bikes. Such initiatives are expected to boost market expansion in this region.

Europe is estimated to exhibit a CAGR of 12.60% over the forecast period. Electric bike sales in Europe have increased dramatically recently, with significant sales occurring in Germany, France, and the Netherlands. This pattern is brought on by people's increasing desire for electric bikes for transportation, recreation, and sports. The subsidies and tax incentive programs for electric bikes in Sweden, Belgium, and France will likely enable a large European electric bike market expansion over the forecast period. For Instance, The Île-de-France transport authority plans to offer citizens EUR 500 to buy an e-bike in 2020.

In addition, key e-bike manufacturers are launching new models in the region. For instance, in April 2021, Peugeot launched its e-bike, the Peugeot eC01 Crossover, in France. The Peugeot eC01 Crossover has a Bosch Performance CX mid-drive motor and a frame-mounted, detachable 500 Wh battery. The company claims the battery provides up to 120 kilometers (75 miles) of range at the lowest assist level. As the demand for electric mobility persists, the market is anticipated to grow over the coming years in the region.

In North America, the market for e-bikes is expanding as people's inclination for low-speed two-wheelers has grown recently. Major cities in the region are adding bike lanes to support the rapid adoption of e-bikes in the city. For instance, in December 2020, New York, Mayor Bill de Blasio officially announced the construction of an unprecedented 28.6 lane miles of newly established protected bike lanes throughout all five boroughs of New York City. This initiative was undertaken by the New York City Department of Transportation (DOT). In addition, an increasing focus on travel and leisure activities and decreasing traffic congestion are some of the primary reasons driving market expansion.

Furthermore, as more bike-sharing companies add electric bikes to their fleets, the demand for these bikes is anticipated to increase shortly. For instance, in April 2021, Biktrix, a Canadian e-bike company, launched a new moped-style electric bike with a 750W motor and a 100-plus mile range. The new e-bike offers two 48V 21Ah batteries with a combined power of over 2,000Wh.

The Rest of the World includes South America, the Middle East and Africa. South America dominated the region. According to Alianca Bike, the Brazilian Association of the Bicycle Sector, the market for electric bicycles expanded by 24.5 percent from January to August 2021 compared to the same period the previous year. In addition, several startups in the country are launching the latest products and getting funds from investors to expand their business. For instance, in October 2020, iFood and Tembici launched an electric bike project for São Paulo delivery partners. More than 500 e-bikes were predicted to operate in SP with exclusive access via iFood delivery partners. With the above trends and developments, the market is predicted to grow healthy during the forecast period.

Segmental Analysis

The global electric bike market is segmented by propulsion type, application type, battery type, and power.

Based on propulsion type, the global market is divided into pedal-assisted and throttle-assisted. 

The pedal-assisted segment owns the highest electric bike market share and is estimated to grow at a CAGR of 12.15% during the forecast period. An e-bike works like a traditional bicycle, with pedals that the rider must manually operate to turn the wheels. With the consistent technological advancements, pedelec manufacturers are focusing on enhancing the overall user interface by designing and developing pedelecs that can be integrated with the riders' smartphones and provide them with real-time information on their vehicles' speed and battery status. Moreover, continuous product upgrades, new model launches, rising sporting events, and associated activities will likely encourage existing and new market players. 

Based on application type, the global market is segmented into city/urban, trekking, and cargo. 

The city/urban segment is the largest revenue contributor to the market and is expected to exhibit a CAGR of 12.46% throughout the forecast period. As environmental and health concerns continue to surge, governments and international organizations impose stringent regulations to reduce carbon emission levels. Thus, e-bikes are the optimal solution to these problems. E-bikes providing electrical assistance for the rider when pedaling have proved an attractive option for people who are less fit or need a long commute.

Moreover, several governments worldwide are using these e-bikes as the most attractive option for reducing traffic congestion and environmental emissions by designing policies to encourage consumers. For instance, the UK government schemes like cycling to work to reduce pollution and congestion in the cities by riding a bicycle to work are also encouraging the purchases of urban e-bikes.

Based on battery type, the global market is bifurcated into lead-acid batteries and lithium-ion batteries. 

The lithium-ion battery segment dominates the global market and is projected to exhibit a CAGR of 13.52% over the forecast period. The lithium battery is regarded as one of the most viable energy storage media for e-bikes due to its high energy and power density, making it the most promising power battery available. Therefore, replacing lead-acid batteries with lithium-ion batteries can reduce the battery pack's volume/weight and increase travel distance. By introducing a new battery, key players are working to improve the battery's overall performance and range. According to the company, Bosch introduced a new battery pack, PowerTube 750, in September 2021, which has a higher energy density than PowerTube 625 and a range that is 20 percent greater. The Bosch 4A Charger has the capability to achieve a complete charge within around six hours.

Based on power, the global market is bifurcated into less than and equal to 250 W and above 250 W. 

The above 250 W segment owns the highest market share and is projected to exhibit a CAGR of 12.13% over the forecast period. Above 250 W e-bikes are mostly apt for off-road or hill areas compared to flat terrain traveling. With the growing demand for recreational activities like off-road cycling, the demand for e-mountain bikes will likely drive the demand for above 250 W e-bikes during the forecast period. These e-bikes are mainly designed using mid-drive motors. In addition, the gear ratio is the single greatest advantage of mid-motors over hub motors. They permit the rider to power the rear wheel through the same chain and gear set as the pedals, enabling low gear selection for climbing steep hills or accelerating with tremendous torque.

Recent Developments

• September 2023- Renowned PC manufacturer Acer introduced its first electric bike in India, the MUVI 125 4G. The MUVI 125 4G is the result of a partnership with eBikeGo.
• August 2023- Ola Electric announced that it would release electric bikes by the end of 2024. Cruiser, roadster, adventurer, and 'Diamondhead' models will be available, according to the EV manufacturer, who displayed prototypes of all four models at its annual 'customer day' event.