Market News

 August 20, 2014
E-Bike Sales Are Surging in Europe

 With a faint electric whir, Iris Marossek pedals her bicycle through concrete apartment blocks in the heart of old East Berlin, delivering mail to 1,500 people a day.

Painted yellow and black like a bumble bee, her bicycle is a nod to both past and future. It is decorated with an image of a curving black horn, harking back to earlier centuries when German postal workers trumpeted their arrival. But the twin battery packs under her seat also reveal it is more than the average bike.

Ms. Marossek rides one of the 6,200 e-bikes in service for Deutsche Post, the German mail service. E-bikes use electric motors to make them easier to pedal and have been gaining popularity in bike-loving countries like Germany, appealing to older people, delivery businesses and commuters who don't want to sweat.

"They are really nice and they are only getting better," Ms. Marossek said. "You're not as exhausted as you would be with a regular bike."

With tens of millions of e-bikes already on the road in China, e-bike sales are now surging in Europe, especially in northern countries with long cycling traditions. For some markets, e-bikes have recently been the only area of growth.

There are 250,000 on the road in Switzerland, according to the European Cyclists' Federation. In Germany, bike sales were down 5.5 percent last year, but sales of more expensive e-bikes were up almost 8 percent and now command about 11 percent of the market. In the Netherlands, which has Europe's highest per capita bicycle usage, the overall bike market fell slightly last year, but e-bike sales rose more than 9 percent.

So far, the appeal seems largely limited to countries with a strong bike culture. In China, consumers often use cheap e-bikes with lead-acid batteries, a bane of environmentalists, instead of scooters, and they have also made headlines for leading to more accidents in a country known for its dangerous roads. In Europe, e-bikes are more expensive and evolving out of the traditional bike market.

In other areas, it still represents a niche. The United States has yet to significantly embrace e-bikes, and in New York State, they are still regulated like motorcycles, presenting challenges to mass adoption.

With the market evolving quickly, a plethora of manufacturers --- companies as varied as Europe's Accell Group, Chinese exporters and even auto giants --- are competing. Daimler's Smart brand is offering zero percent financing on its $3,000 e-bike in Britain, while BMW introduced its own e-bike for about $3,600 this year.

The higher profit margins have saved many a bike shop in recent years. A typical e-bike sells for about $2,700 in Europe, retailers said. The average price of a bicycle, which has been bolstered by the new motorized versions, sells for about $1,300, according to the federation.

"It's really exploded the last six or seven years," said Lars van der Wansem, product manager of Bike Europe magazine, adding "the Netherlands, Denmark, the north of Germany is at the forefront" of e-bike growth.

In Germany, where e-bikes have been particularly popular, the postal service tends to use them for steeper or longer routes. They also ease the burden for an aging work force.

"We noticed that our employees weren't getting any younger, and we wondered how we could relieve them," said Frank Kolaczinsky, Ms. Marossek's boss.

"They were sweating, too," said Ms. Marossek with a chuckle, while standing next to her bicycle near a health clinic on her route.

Trendy hotels like the Hotel New York in Rotterdam rent out small fleets of e-bikes. At Au Guidon Vert, a small bike shop in the Etterbeek neighborhood of Brussels, the owner, Nicolas De Keghel, said one in four bikes he sold was now an e-bike, accounting for half of his income.

An e-bike made by Velo de Ville, a German brand, was on sale at his shop for 2,150 euros, or nearly $2,900, next to a regular bicycle by the same company for about $940. A circular motor made by Bosch, the auto supply giant, was nestled between the e-bike's pedals.

For buyers who commute, the sweat factor seems to be a significant one.

Noel Regan, one of Mr. De Keghel's customers, bought a Velo de Ville e-bike about a year ago. Mr. Regan, 35, is an Irishman who works for an energy industry association in Brussels.

"I have a regular bike," said Mr. Regan, who paid about $4,000 for his e-bike. "But I wanted something I could commute to work in so I wasn't hot and sweaty when I arrived."

His bike takes about an hour to recharge and he can get about four commutes between charges.

"I got quite an expensive one, but I think it was worth it," he said. "It's something you look forward to, to go home in the evening."

Others see e-bikes as a way to avoid car traffic.

David Stellini recently bought an e-bike with a cargo carrier in front to carry his two small children around. He works as a spokesman for the European People's Party, the largest center-right political party in the Parliament, and has been commuting to work by car.

A recent traffic snarl during a visit by President Obama pushed Mr. Stellini, 37, over the top.

Getting to work "took me two hours or more, two-and-a-half hours, and I live 20 minutes from the Parliament," he said.

"When you buy this cargo bike you need a motor, especially in Brussels because it's hilly," he said. "I could have bought a cargo bike which is not electric, but I rode my bike without the electricity switched on, and it's quite difficult."

In Europe, they are the latest sign of divergence between north and south, as the economically fragile south has largely remained cool to e-bikes because of their fatter price tags, executives said. The industry has not taken off in countries like Italy and Spain, while in France, e-bike sales rose more than 17 percent last year, but off a low base; sales totaled 56,000 e-bikes, compared with 410,000 sold in Germany.

"To imagine going into Italy and establishing an e-bike sector, apart from one or two wealthy cities like Milan, you're really going to struggle," said Kevin Mayne, the cyclists' federation's director of development.

"In the Netherlands, in Germany, people are used to paying 600, 700, 800 euros for a daily bicycle," he said. "In a lot of other countries a daily bicycle might be a €100 bicycle from a supermarket."

The European Union limits e-bikes to a top speed of 25 kilometers per hour. Any faster than that and they are regulated like a motorcycle and require riders to wear a helmet and manufacturers to obtain special certifications.

Nonetheless, faster bikes are catching on in Germany, said Hielke H. Sybesma, the chief financial officer of the Accell Group, one of Europe's largest manufacturers of e-bikes.

"What we see now in Germany are performance e-bikes," he said. "The average age of the user is coming down, and especially in the performance bikes."

The e-bike Ms. Marossek uses for the postal service has a throttle, unlike most e-bikes that are sold at the retail level, but its top speed is capped at about 21 kilometers an hour.

She is what is known as a jumper, shifting mail routes depending on the day. Some days, she rides an e-bike and some days a regular bike. With heavy mail cartons on the front and back of her bike, she says, "sometimes you can come to hills and it can be very exerting."

"The other bikes really give you a workout," she said. "I notice the difference because sometimes I use a regular bike."

Not that there aren't drawbacks. She smiled broadly while astride her e-bike. "This bike isn't as good for my figure."