Crazy times in the world of ebikes
It seems like the silly season has come early this year. I'm only a new player to the world of electric bikes and its been one hell of an apprenticeship! We all know that Covid has impacted us in different ways. You'll also have experienced how difficult it is to get your hands on anything without some sort of delay. And yes, ebikes are no different.
So what does this mean for the average customer? Someone who wants an ebike now and is not willing to wait may be left a little disappointed. More frustration and in some cases, having to opt for your second choice option, or having to wait a little longer for your ideal ride.
The frustration is being felt on both sides as suppliers are equally impatient. When demand is high you want plenty of product to sell. Unfortunately it's difficult when you have to pay for stock and then wait up to 5 months to receive it. Then when you add the sometimes complex and equally inefficient government bodies who approve the importing of ebikes into Australia, it can send you down a dark hole of despair (maybe a little dramatic but you get my point).
So why are there so many delays?
Delays have been caused by a cumulative effect of several issues. In short, the main issues causing delays are:
- Long manufacturing lead times (60-90 days are now common)
- Lockdowns placing strain on production, freight, manpower
- Slow freight transit times due to high demand
- Low supply of ebike componentry (which slows down production)
- High shipping freight demand (slows down shipment)
- Slower shipment unloading times due to increased Covid safety protocols
- High consumer demand meaning stock sells out fast
I don't want this to sound like a whinge session as the ecommerce space has exploded recently which is great for retailers. The real question to ask though is what will 2022 bring for the consumer? Will things improve or should we expect more of the same?
The outlook for 2022
As I gaze into my crystal ball slowly the image becomes clearer. Here are my predictions. I am not psychic but this is just based on my own experiences and the information being feed back to me by my suppliers.
eBike prices will increase
In fact this has already happened and it is mainly due to the crazy freight prices that have skyrocketed in the last 12 months. Freight is calculated in m3 (cubic metres). I have seen a fourfold increase from some destinations and due to high demand I can't see this dropping anytime soon. This tightens profit margins and becomes difficult to manage without raising prices.
We are also seeing the price of bike consumables increase for aluminium so it looks fairly unlikely that the prices will go any other direction than up. Once existing stock is sold which may have been imported when freight was cheaper you will likely see a rise in price at some stage in 2022. Maybe I am wrong but I will not sit on the fence and be bold in my prediction.
eBike demand will increase worldwide and in Australia
This is based on data which has shown steady increases year on year and this is likely to continue. This can be attributed a number of drivers:
- improvements in ebike technology
- more buyer familiarity
- better bike infrastruction (cycle ways, cycle lanes, storage facilities)
- safer riding with potentially less cars on the road (as people work from home
Increased competition and new suppliers will enter the market
As the demand continues to increase it's pretty reasonable to assume new ebike suppliers will start up. This will be a mix of online retailers but don't be surprised if some large US and European players will look to set up shop in Australia.
As ‘normality’ returns, travel reopens and supply catches up with demand, don’t be surprised if we see well-funded new names entering our retail market before the end of 2022. Some direct-to-consumer names to look out for include Rad Power and VanMoof. These relatively new direct brands and others are attracting unprecedented levels of venture capital funding, allowing them to aggressively expand.
Electric scooters will surge in popularity
This again is not hard to predict. There is still resistance from some states in Australia which has stunted growth in Victoria but as escooters become safer and riders more cautious the growth will explode.
Once the red tape is removed larger companies will jump on board and market aggressively to a wide cross-section of the public. There will be an improvement in after-sales service which will again lower buyer resistance. In QLD they are very popular and once Victoria jumps on board sales will skyrocket.