Automotive stalwarts such as BMW, Porsche and German supplier Robert Bosch are betting that e-bicycles will become a lucrative business as consumers look for newer, cheaper and eco-friendly ways to get around.
McKinsey & Co. projects that the micromobility market will grow by 9 percent annually to reach a cumulative $260 billion by 2025. Bikes, including manual and electric ones used in bike-share services, will account for about $180 billion of that, with e-bikes accounting for a growing share of that market.
“In most markets, e-bikes are growing anywhere between 5 and 15 percent per year, while conventional bikes are growing more like 2 percent per year,” said Kersten Heineke, leader of the McKinsey Center for Future Mobility. “They’re cannibalizing conventional bike sales.”
E-bikes are popular in countries with strong biking cultures, such as Germany, Heineke said. They’re starting from a lower point in the U.S., where decades of car-centric urban planning have made bicycling as a form of transportation sometimes difficult or unsafe.
For the U.S. e-bike market to grow rapidly, cities and bike manufacturers will need to make sure riders feel safe and that they feel like they are getting significant value for their money, said Carla Bailo, an industry consultant.
“People have to feel safe in them and in their ability to get around, and where the infrastructure for that exists is where sales are going to compound,” she said.
Public-private partnerships will be needed to boost safety and prompt U.S. cities to rethink their approaches to infrastructure, transit and urban planning, Bailo said. Bicyclists often have to share the road with vehicles or ride on sidewalks alongside pedestrians, unsafe approaches that often result in collisions.
Early during the COVID-19 pandemic, many American cities began to experiment with providing more walkways and removing street parking on crowded roads to provide more room for cyclists and pedestrians. That trend is likely to continue, Bailo said.
“Cities are looking for other ways to move people around other than just buses and cars,” she said. “The whole way that we lay out cities and manage transportation options needs to be revised.”
Automotive companies have noticed how cities are rethinking transportation and infrastructure and see an opportunity in e-bikes and other nonautomotive forms of mobility, Heineke said.
“They recognize that certain people will continue to buy cars in the future but might use their cars less and complement them with other modes of transport for certain use cases,” he said.
Bosch, the world’s largest auto supplier, has invested significant resources into its e-bike systems business in recent years. The company sees itself helping to “bring in a new era of mobility” centered around sustainability, safety and excitement, said Claudia Wasko, general manager of Bosch eBike Systems Americas.
“With e-bike systems, we achieve all of that,” Wasko said. “E-bikes are pioneering for mobility, and they’re a big success for us.”
Not all investments into e-bikes, scooters and other forms of micromobility have paid off. General Motors killed its Ariv e-bike business as the pandemic began in 2020, while Ford quietly sold its e-bike and scooter division, Spin, in March 2022.
But others have stuck with it. Porsche acquired a majority stake in Croatian e-bike maker Greyp in late 2021, while Vietnamese automaker VinFast displayed four e-bike concepts at its booth at CES this month.
“The demand for bicycles continues to grow and be significant,” Heineke said.
Cost will also remain an important factor for e-bike manufacturers as they look to expand the market for their products, Bailo said. According to the National Conference of State Legislatures, e-bikes cost between $2,000 and $3,000 on average compared with about $1,000 on average for a traditional, midrange commuter bicycle.
States and municipalities are considering e-bike rebates to encourage sales. California this year will launch a $10 million program to provide consumers with up to $750 for a typical e-bike, while cities including Nashville, Atlanta and Washington, D.C., are considering programs of their own.
The e-bike market could take off, Bailo said.
“I’d anticipate by 2025, the market will double for e-bikes and grow even further beyond that as people seek to have a more eco-friendly way to get around, as infrastructure improves and as the price of e-bikes comes down,” she said.