The Asia-Pacific region’s
e-bike industry is ideally
placed to be a driving force
in the electric revolution
globally
Tesla’s stock surged to record levels,
Geely-owned Volvo announced
an all-electric fleet by 2030 and
Volkswagen AG publicised plans for
six new battery plants by 2025.
All these recent business headlines
reflect the growing momentum of
everything “e(lectric)-mobility”.1
Although intriguing, these
developments represent only a
fraction of a much bigger and
more complex global equation,
encompassing technical innovation,
climate change, urban development,
sustainability, government policies,
change of consumer behaviour
and much more. Electric cars may
dominate the headlines, but they
are not leading the transition to
electric vehicles.
Why? Cost and infrastructure
issues are still plaguing electric
cars’ broad adoption. Instead,
two-wheel vehicles like electric
bicycles (e-bikes), electric scooters
(e-scooters), electric motorcycles
(e-motorcycles), and micro-mobility
devices are leading the way.
When it comes to the number of
vehicles on the road, electric twowheel
vehicles are way ahead of
their four-wheeled counterparts.
It is not in the metropolises of North
America or the major cities in Europe
where electric vehicles are making
the biggest headway – it is in Asia
and more specifically, China. In the
UK, there are some 140,000 electric
vehicles today – quite a surge from
just 3,500 in 2013, but in China,
22.7 million of them were sold in
2018 alone – more than in the rest
of the world combined.2
The surge of e-bikes is going
beyond China. India, Indonesia,
Vietnam, Thailand and other Asian
markets are embracing electric two
wheelers at scale. While the rest of
the world is taking their first steps
to an electric vehicle future, Asia is
already walking at pace. Extending
from its already impressive base,
the Asia-Pacific market for e-bikes
is expected to grow at a CAGR of
10.1% between 2020 to 2027 and
to reach US$10.26 billion by 2027.3
Figure 1: E-bike market – growth rate by region (2021-2026)
Source: Mordor 2020.
The other main growth area is
Europe, with the Netherlands and
Germany currently leading the
charge. More than 40% of the
bicycles sold in the Netherlands last
year were electric. In Germany, a
third of the 4.3 million new bicycles
sold had a battery, according to the
country’s industry association.4
An important consumer market,
the Asia-Pacific region also is a
production hub for e-bikes and
related components, like battery
cells and charging infrastructure.
Opportunities for investors
With major suppliers like Bosch,
Liv Cycling (EnergyPak), Panasonic,
Samsung SDI, and Shimano Inc.
commanding more than 70% of
the global market for e-bike battery
packs, the segment is moderately
consolidated. But there are still
exciting opportunities for investors.
The e-bike battery pack market offers
a dynamic growth outlook with a
predicted compound annual growth
rate of 13% for the five-year period
ending in 2026. Commitments
like Samsung SDI’s plan to invest
US$1.15 billion into battery production
capacities in Xian and Tianjin, China
are testament to that potential.5
Closely connected to power cells is
the market for charging equipment.
The market is young, and its
potential is largely untapped as
yet. Critical areas like speed of
charging to reduce vehicle downtime,
improved convenience from wireless
and on-demand mobile charging,
more efficient charging through grid
and renewables integration are some
of the opportunities. Innovations
in these areas are just beginning
to emerge and their broad scope
creates a highly diverse market with
hundreds of competitors.
It should come as no surprise that,
in addition to native players like
Merida, Shimano or Samsung,
international players are also
strengthening their presence in the
region. Bosch eBike Systems for
example opened its new Asia-Pacific
headquarters in Taichung, Taiwan
in 2020. It is the latest milestone
in a continually growing footprint in
Asia-Pacific, after successful market
entries in Australia, Japan and New
Zealand within the last six years.6
Continental also has corporate
offices in China, South Korea and
Vietnam.
Companies which are successfully
competing in the e-bike market
already are enjoying the benefits.
Giant Manufacturing, the US$4 billion
Taiwanese group, saw revenue jump
55% year-on-year in June 2020.
Accell, the US$730 million parent to
brands such as Raleigh and Sparta,
earned more than half its revenue
from e-bikes last year.7
Other companies outside the core
bike industry are taking note and
trying to hop on the bandwagon.
Traditional car and motorcycle
manufacturers are among them.
General Motors (GM), Ford Motor
Company in partnership with Pedego,
Peugeot, Volkswagen, Ducati Motor
Figure 1: E-bike market – growth rate by region (2021-2026)
Source: Mordor 2020.
Holding in partnership with Thok,
all introduced e-bike offerings of
some sort in the last two years.
Jeep unveiled its efforts as part of a
2020 Super Bowl advertisement, the
most expensive TV advertising time
available in the US.8
The appeal goes beyond the
immediate, established players
within the mobility sector though.
The technological advances brought
about by e-bikes have given other
industries, as well as private and
institutional investors, food for
thought.
The future of e-bikes
Where the bicycle’s design has
arguably remained constrained to
a dual triangle frame and a pair of
wheels for most of its existence,
the e-bike provides the opportunity
to create a gadget which can build
in software appeal and tech-ready
hardware.
This explains the attraction for
Foxconn Technology, the main
assembler of Apple products, who
has joined forces with a fellow
Taiwanese hardware firm, Yageo
Group, to delve further into electric
vehicle production.9
It is part of the rationale as to why
Groupe Bruxelles Lambert (GBL),
which owns the lion’s share of
Adidas, took a controlling stake
in Canyon Bicycles in late 2020.
Joining GBL as an investor is Tony
Fadell, a former Apple executive,
renowned for his work inventing the
iPod and NEST (the temperaturecontrol
device). One of Canyon’s
most recent projects was a prototype
for an “electric pedal car”, which was
rumoured to now receive significant
funding following the acquisition.10
Investors are betting on the
continuation of this growth trend.
Shares in Giant Manufacturing have
risen 43% so far this year and are
now valued at 26 times Daiwa
Capital Markets’ forecast earnings
for 2021. Shimano, the US$19 billion
Japanese group which controls
roughly half the global market for
bicycle components, trades on
a forward multiple of 35 times,
according to Refinitiv data.11
In summary, the Asia-Pacific region
is in a prime position to not only
benefit from continued sales
growth in the e-bike sector, but also
harness significant investment and
innovation. We’re looking forward
to seeing where e-bikes will take
investors in the coming years.
