FIM Brussels - PTWs & the rise of e-mobility
In Europe, a mobility reformation is on the cusp of coming to fruition. Electric forms of mobility are on the rise across the transport sector. While consumers have been slow to adapt, legislators at national and EU level have gradually been increasing their support for electric powered alternatives. At present, e-mobility has a relatively minor, but growing, market share across most road transport platforms. For Power-Two-Wheelers (PTWs), the change to electric has not filtered through to the sector in any significant manner. However, electric alternatives have indirectly began to have an impactful influence on the market.
Specifically, the relatively sudden emergence and rise to prominence of e-bikes has had a profound effect, where e-bikes have thus far succeeded in etching out a fresh space in the existing markets. The knock-on effect is perhaps most vivid in the commuter market where e-bikes, now firmly nestled in between bicycles and low-powered PTWs such as mopeds, are pitching themselves as an alternative option. While this could amount to a serious challenge for the PTW market, as with other forms of electric mobility, several stumbling blocks must be overcome. Among the main issues are access to charging infrastructure and cost, the latter of which is perhaps proving to be the more important.
In Europe, competitiveness within the PTW market has been compounded further by the influx of Chinese e-bikes onto the European market at a fraction of the cost of the pre-existing products. In the European market alone 800,000 Chinese e-bikes were sold in 2017, representing an increase of 370,000 on the previous year. Overall, foreign imports account for around €458m of the European e-bike market of €1.86bn, of which Chinese e-bikes account for €264m. These numbers are far from dominant, but the significance of them are amplified when you consider that Chinese e-bikes held a market share of virtual insignificance as recently as 2010. Currently, their market share is growing at an impressive speed and this trajectory shows no signs of faltering.
The clear factor which distinguishes Chinese e-bikes and other PTW alternatives remains to be cost. Almost without exception, Chinese e-bikes are selling at prices below that of European alternatives, with some selling at up to half the cost. This stark difference is not something legislators have failed to notice. In October, the European Commission launched a formal investigation into the alleged dumping of Chinese e-bikes on the EU market. In December, this was compounded by the European Commission’s decision to open a second investigation into the financing of Chinese e-bikes amid accusations that the Chinese government have been providing illegal state aid.
At present, the EU has not elected to take formal action and is continuing its investigation into the cases, which it can do for a maximum of 15 months. While lower costs may continue to attract consumers, a distinct disparity in safety levels and requirements remains. Under current regulation, those PTWs which are below 250 watts in power and capable of speeds of 25 km/h or less are not subject to type approval. Added to this, e-bikes within the aforementioned parameters, do not require use of helmets under current regulations. It is evident that the almost instantaneous emergence of e-bikes on the European market has posed challenges, both to existing market players and legislators. What remains to be seen is how regulators respond following the culmination of their investigations and in terms of safety regulation.