Perhaps the most commonly asked question of our writers is simply &#;why are e-bikes so expensive?&#; Admittedly, we have the luxury of rolling about on demo bikes that come and go, thus shielding us from considering the impact on bank accounts; you might think the thought rarely crosses our minds. It does, or at least the UK consumer is hyper-focused on price; put simply, we do not yet have the cycling culture that mainland Europe enjoys and as such, we tend to spend less, on average, on our bikes.
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Bikes are, well, bikes. Electric bikes are both bikes and consumer electronics products. As such not only does the material cost differ, but so does the savvy required in the supply chain to design, manufacture, assemble and ship them.
In ultra-simplified terms and to show you how the price stacks up, think of the display as hosting technology equivalent to that found in anything between an early digital watch and a smartphone.
Think of the battery as the sum of its components &#; loads of individual cells, hopefully a battery management system and a bunch of additional extras to guarantee it operates safely. Alongside this, consider that lithium-ion battery components &#; including cobalt and lithium &#; are among the world&#;s most sought-after and, as such, soon-to-be limited resources. Thanks to this potentially hazardous mix of materials, shipping costs are higher when batteries are involved.
The supply of the raw elements can come from places very far away from the manufacturing destination, or places that recognise the political football they are holding in terms of who they sell to. Concentrations of the key materials are found in only a few places, namely the salt lakes of South America, or mined in Australia, Canada, China and Zimbabwe. Take the geopolitical tension in the Taiwan Strait and we are on any given day one stray fighter jet away from turbulence in the supply chain, which could stunt supply and spike prices globally.
That supply of battery materials is largely going to the automotive and consumer electronics industries. The battery technology is, after all, not new. The mobile and laptop segment got there first, establishing scale and supply chains long before the wider electric vehicle world came in with its heavy demand. The e-bike industry joined one of the world&#;s largest queues. In theory, e-bikes are even competing against vapes and other such devices for battery material.
For this reason, the e-bike industry (in Europe) is coming together to assess its overall buying power and future requirements for precious raw materials. With a collective answer the e-bike industry will be able to showcase its buying power and possibly bring prices down in future. It&#;s complicated, but in simple terms we&#;ve a supply and demand equation to suss out. In the context of the EV world, e-bikes are not heavy users &#; a typical e-bike is believed to use 200 times less material in its battery versus an electric car. That said, e-bikes now outsell electric cars by some margin and soon they&#;ll outsell non-electric bicycles too.
Then there are the motors. Take a look below at the exploded view of the latest Pinion head-turner that also integrates a gearbox and you&#;ll soon understand why the prices of electric bikes are higher than you might have anticipated. Imagine first designing and then putting that together. Of course this is a high-end and complex product, but assume that any given e-bike motor is even half as complex and, well, it&#;s still complicated and engineering heavy, isn&#;t it?
There&#;s more. Add in things like currency fluctuations, import tariffs, shipping prices, labour costs, raw material price movements, assembly, boxing it all up and a slice of margin for those who distribute the product to market and you&#;ll see why e-bikes are considered to be so expensive.
I hate to mention it, really, but there&#;s also Brexit, which is a factor since the UK imports the vast majority of its bikes from abroad. In fact, we make barely any domestically and even in those rare cases, key parts have to be imported. Cutting ties with our largest trading bloc, Europe &#; where many electric bikes sold in our market are now made &#; was unwise given that 80% of electric bikes made in Europe are sold in Europe. If you&#;re in the EU, the supply costs will be fairly uniform. If you&#;re not, there are various fees to pay for shipping outside of the trading bloc. If you order an e-bike from mainland Europe, expect that UK customs will not release the shipment to you until you pay a triple-digit fee (calculated according to the landed value of the product).
But wait, don&#;t e-bikes all come from China? Not anymore. Anti-dumping tariffs applied across Europe on Chinese electric bikes stemmed the flow massively a few years back and they have not recovered since, though the UK is in the process of consulting on these tariffs.
In context of all of the above and considering they&#;ll save most of us transport expenses once bought and you might come round to the idea that e-bikes are, in fact, not expensive. While a car becomes a depreciating liability from the moment you drive it off the forecourt, an e-bike can genuinely be an asset once you compare running costs and depreciation.
If you&#;d like a further break down on transport costs covering e-bikes versus the car and trains, we&#;ve got that covered. The headline is, per mile, an e-bike probably only costs you around 0.4p to run, while a car would be more like 14 to 19p, depending on fuel type and current pricing. Oh yeah, and train prices are going up again, obviously.
Would you believe that almost all of the above is actually a simplified take?
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During Covid&#;s worst shipping prices rocketed as the demand for containers grew. That added to bike prices.Still here? Good, stick with me a bit longer and this is where things get interesting for you, the potential electric bike buyer.
Covid really put a spanner in the works. Perhaps you read that the pandemic was a dream come true for the bicycle industry. Well, for a brief moment in time it was. The Government permitted bike shops to remain open throughout the lockdowns, deeming cycles to be both a key transport form and a way to maintain exercise in relative isolation. In economics terms, it was a black swan &#; a once-in-a-generation set of conditions that took markets by surprise.
Some industries collapsed in that moment; others, such as the bike business, flourished. It&#;s fair to say that some brands got carried away by the momentum upwards. Now, on the way back down, when one rushes to clear stock with discounts, others kinda have to follow or risk being left holding all of their stock. That creates a rush for clearance. Sadly, that probably means some businesses won&#;t survive, because in this scenario very few are able to make a profit.
For every reaction there is so often an equal and opposite reaction. In that euphoria, where bike sales had come out of the doldrums of and into the boom time, orders in the supply chain rapidly shot up. Consumers raced to bike shops, who promptly sold out. They ordered more and forecasted &#; based on strong sales demand &#; that the good times had legs for a while yet. That message went to the distributors, who in turn upped their forecasts and wanted to max out on the demand. That in turn went to the manufacturers, who maxed out their production &#; hitting a ceiling of sorts. Still, production rocketed, but where the limit was hit, delays in lead times developed. People were still ordering at a record rate, despite that lag in supply. There was, in hindsight, vastly incorrect forecasting extrapolated throughout the supply chain as everybody tried to max out on the upward trend.
Then Covid&#;s lockdowns stopped. With that cars returned to roads, which became less friendly to cycle on. Demand dropped off a cliff. Bikes bought at this time flood a second-hand market, stymieing demand for new bikes at full price. Then came the cost of living crisis, attributed largely to the Russian invasion of Ukraine, among other factors. Demand really dropped off another cliff for items considered to be luxuries, including electric bikes. Yet the ships carrying orders placed years ago continued to arrive. Supply massively outweighs demand. The bikes still come.
We&#;ve reached our destination, where, finally, this article becomes useful to you, our prospective e-bike owner.
As it stands there are warehouses up and down the country packed to the brim with bikes. Remember, there&#;s probably more on the way too. That presents suppliers with a wholly unwelcome problem: those boxes need shifting. The only way to do that in a cost of living crisis that shows no sign of abating is to offering promotions, discounts, sales; bigger than usual in volume and value.
We make no secret of being a portal that hopes to get electric bikes into your hands through a healthy mix of education, buyer&#;s guides, reviews and inspiration. We even publish an electric bike magazine three times a year on those topics.
So, in view of bringing about some kind of supply and demand equilibrium, here&#;s some of the most astonishing discounts we&#;re seeing in the marketplace at present in terms of value.
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